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
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.