Cashflow an issue? Debtors not paying you quickly enough? We understand the financial difficulties that SMEs face, especially when chasing debtors, managing the day-to-day invoices or stretching finances between payments and purchases. Ignite Business is here to help you.
We specialise in small business Invoice Finance
Any small-medium enterprise is defined as a company of less than 250 people and an annual turnover of no more than 50 million annually. We provide small business invoice financing options that can help improve your cashflow, giving you funds to invest in growing your business.
25+ years of experience in providing Invoice Finance for UK SMEs
We have a product to suit your business, whether you need more efficient cashflow to remove the constraints of slow-payers, or if you need help to bridge the gap between purchasing goods and getting paid, we can help.
What is invoice financing?
Invoice financing is an agreement you make with invoice financing companies and is a way of borrowing money based on what your customers owe to your business. It works by using unpaid invoices to represent money that will be paid to you. This allows you to avoid the normal lull between payments and continue on, business as usual.
What should you remember when applying for SME invoice financing?
Invoice financing can be a great aid to SME`s but like anything, it can be very easy for businesses to become dependent. Invoice financing should be used to aid a business for a short period of time, avoid using invoice financing for long durations of time to avoid high costs and lender debt.
Invoice financing companies
There is a wide range of invoice financing companies. Some specialise in helping SMEs and start-ups, whilst others offer white-label customer services. Finding the best invoice finance agent to work with your business can be a long and complicated process. At Ignite, we have contacts with all the major lenders and are able to advise which would match your business needs best.
Find out more about small business invoice finance here
Are debtors not paying on time? Contact Ignite today
Advantages of working with an invoice financing company
- Take Advantage of Opportunities
- Invoice Finance is More Flexible than Traditional Loans
- Reduce the Chance that Late Payments will Cripple Your Business
- Save Money on Admin Costs
- Access Cash Whenever Your Business Needs it
For the best invoice financing, apply with Ignite today
Finding the best invoice financing is not always straightforward, However, our simple 3 step application process allows you to spend less time chasing unpaid invoices and worrying about finances and spent more time on turning your SME into a huge success. We offer fast turnarounds and funds available in just 24 hours. Take some stress out of running your business and leave the invoice financing and debt chasing to us!
Whatever it is you are looking for, we have a product to suit your business. Whether you need more efficient cashflow to remove the constraints of slow-payers, or if you need help to bridge the gap between purchasing goods and getting paid, we can help. Contact us today to find out more information and get a free quote. As an invoice financing company, Ignite Business Group offer a range of services to choose from; Invoice Finance, Invoice Discounting, Asset based Lending and Invoice Factoring and more.
Apply for funding in 3 simple steps...
You may have heard that invoice factoring is like a loan. While the practice does have some similarities to loans, invoice factoring can be a more flexible option for improving cash flow without incurring long-term financial obligations.
Invoice factoring does not create any liabilities or put any assets at risk, so it does not qualify as a loan. Think of it as more of an advance on accounts receivable where your business does not take on any debt.
With invoice factoring, an invoice factoring company purchases outstanding invoices and collects a processing fee once the invoice is paid. It’s very similar to any asset based lending, but the outstanding invoices take the place of collateral.
Learn more about invoice factoring here
Invoice Discounting (sometimes also known as Confidential Invoice Discounting or CID) is a non-disclosed facility, meaning that your business’ clients are unaware that you use the facility. You continue to handle your credit control in house, and deal directly with your clients regarding invoices and collection. When compared to invoice factoring – where the factoring agent deals with the client invoices directly – there is much more trust.
Therefore, it is usually reserved for larger businesses, or ones that have been operating for longer.
Explore invoice discounting here
Invoice financing vs discount vs factoring
There are two main types of invoice finance:
The main difference is whether you or the factoring agent take control of the debtor book and is responsible for contact clients to settle invoices.
With both types, advances up to 95% of the outstanding and releasing funding within 24 hours are possible.
The total funding provided is based on specific criteria set out by the lender and allows businesses to access finance for cashflow or investment purposes using an all too often unused asset on your company’s balance sheet.
|Invoice factoring||Invoice discounting|
|Cash released in 24 hours||Yes||Yes|
|Up to 95% upfront||Yes||Yes|
|Finance company contacts debtors||Yes||No|
|Business owner contacts debtor||No||Yes|
Which is best invoice finance solution for your business?
UK export finance
We also offer export finance factoring services to UK companies. This enables them to compete more effectively in the international markets and smooth out any issues caused by cashflow and trading overseas.
Waiting on payments from overseas clients can strain your business cash flow and make it hard to take on expansion opportunities. Our export trade factoring services can help your company succeed.
If you need to release working capital from overseas sales, export finance can help UK companies release funds to your business. Export finance is a specialist type of trade finance, which can be tailored to your business needs. Find out about export finance here.
Doing business internationally involves risk; however, you can rely on Ignite Business Group. Our knowledge and expertise will help you attract and retain new clients.
Asset based Lending
Asset Based Lending (ABL) is a more advanced form of invoice finance, which in addition to debtors, also considers the wider assets of the business.
Asset Based Lending provides a flexible facility that works in a similar way in Invoice Discounting, but leverages cash locked up in other assets as well as just the debtor book.
Typically, Asset Based Lending is more commonly used by mid-sized and larger companies as the additional monitoring required to make the facility work tends not to be cost effective for smaller businesses.
Find out about the confidential nature of ABL here.
Advantages of Asset Based Lending
- Achieves a higher level of funding than Invoice Finance alone
- Bespoke funding solution, tailored for the needs of your business
- Improve your business cash flow
- A facility that grows with you
Contact Ignite Business Group today! Whatever your business need or preferred finance solution, we can help advise you and find you the best deal in the market.
According to government statistics, on average, over 10,000 business go out of business each year due to cashflow issues.
A factoring company is a specialist lender who will purchase your businesses’ unpaid invoices and pay you a percentage of the amount owed upfront.
You can receive the majority of your invoices value far quicker than the usual 30-90 days, and often in as little as 24 hours. The factoring agent then takes control of your sales ledger and the task of collecting outstanding invoices will belong to the invoice factoring company.
It’s important to note that the business factoring lender will charge a fee for the service, often a percentage of the invoice amount.
More and more companies are beginning to realize the advantages of having access to more flexible finance solutions. If your company is facing issues with an unpredictable cash flow, invoice factoring may be a viable solution to help you take advantage of new opportunities or invest in the growth of your business.
The expert, experienced consultants at Ignite Business Group, are ready and willing to help your company with small business invoice factoring.
Short-term vs long-term financing
One thing to consider when thinking about invoice finance is what you need the finance for. So, whether to choose a short-term or long-term finance source depends on your business needs. Both invoice factoring link and invoice discounting link are good options – particularly for short-term finance. Let’s explore why.
Short-term financing is usually used for cashflow needs or to improve working capital. For example, to purchase extra stock, or to cover day-to-day expenses. Short term Finance sources include: bank overdraft, short term loans, line of credit, etc.
Long-term financing is commonly used to fund strategic business goals or long-term investments, such as purchasing land or fixed assets. Long term financing sources include: issuing equity, debentures, bonds, venture funding, etc
Let’s compare short- vs long term finance:
|Short-term financing||Long-term financing|
|Typically under 12 months||5 – 20 years|
|Variable rates||Fixed rate|
|No charge on company assets||Normally secured on company assets|
|Specialist lenders and banks||Banks or investors|
|To raise limited amounts to be repaid quickly||Larger amounts|
|Use for cashflow and short-term needs or opportunities||Use for long-term investment strategies|
|eg Invoice factoring, invoice discounting, line of credit, overdraft||eg Bank loans, share capital, debentures|
Frequently Asked Questions
Invoice finance, also known as accounts receivable financing, is an alternative funding option for small business owners. By financing your invoices, you have fast access to working capital that you can use to build your business.
The invoice finance process is pretty straightforward:
– You submit unpaid invoices for work completed
– The lending company verifies invoices and advances you the funds (up to 95% invoice amount) within 24 hours
– The factoring company collects payment from your customer according to your payment terms
– When payment is received, the lender releases the remainder of the invoice amount, minus a small fee
See our video guide for further details
Businesses that are selling goods or services to other businesses can use invoice finance to gain necessary working capital. Invoice Finance companies can help businesses of all sizes in almost any industry. Typical industries that might have a requirement are: recruitment, logistics, manufacturing, construction, information technology and many others.
You don’t need to be in business long – we can find funding for new start companies. If you have an invoice, we can help get you funded. Even if you don’t have an invoice yet, but you just secured a new contract, we can get you set up.
To start, we will ask for some details about your business, which will include Sector You Operate in, Turnover, List of Customers, Aged Receivables Report. But don’t worry Ignite will help you every step of the way.
Invoice Finance provides funding for both new invoices and outstanding invoices.
Eligible invoices are:
– Current – Most lenders will fund outstanding that are between 90 and 120 days old
– Payable by another business – Invoice finance is not an option for invoices raised to consumers
– Unpledged – No other company can have a claim to the invoice.
Some lenders will be quicker than others, but in general it takes 5 -1 0 working days from start to finish.
Once an invoice is submitted, you’ll typically receive funding within 24 hours.
Costs vary by industry and volume. Please contact us so we can get you a quote for your business.
Advances on invoices will vary by industry and volume. Advances can be anywhere from 80% – 95% for most industries.
No. We understand that some customers pay faster than others. Most lenders will provide the flexibility to select which customers you would like to finance.
Many lenders will require you to enter into a minimum 12 month contract. We can negotiate length of contract for you, and most lenders have flexibility here.
In general lenders will send money via BACS transfer, which usually take 3 days. Alternatively, you can request a same day transfer. Please note lenders usually charge for a same day payment transfer.
Lenders will have different views. This is where we can help make sure you are with the right lender. As a general rule of thumb most invoice finance lenders require £100K of invoices assigned to them per annum.
There are no maximum amounts to funding. Invoice Finance grows with your business. If you have the invoices, funds are available.
There are two different types of factoring programs – recourse and non-recourse. With recourse, your business must buy back receivables that the invoice finance company is unable to collect payment. In a non-recourse agreement, the invoice finance company takes the risk of non-payment by your clients. Because of the added risk, non-recourse fees are slightly higher.
Yes! Invoice finance companies base their funding decisions on many different variables so even if you have had problems in the past, this does not mean you will be declined funding.
If an account debtor (your customer) receives notice that you are working with an invoice finance company and questions the process, simply explain that you have selected a company to manage and finance your invoices. It’s likely your customers are familiar with invoice finance and many of them may already work with invoice finance companies. Financing invoices shouldn’t impact relationships with your customers. The lender may reach out to confirm details from time to time, but communication will be professional and courteous.