Invoice Finance is a type of business finance where a business raises finance against its unpaid invoices, i.e. the business’s debtor book. This is only suitable for businesses that trade with other businesses, where credit terms are provided. There are two main types of invoice finance:
The finance provider takes security over the debtor book using a debenture and advances up to 95% of the outstanding invoices, providing the business with cash flow to trade. Funding can be available as quickly as within 24 hours of raising the invoice, allowing you to receive funds in advance of your client making payment.
The total funding provided is based on specific criteria set out by the funder and allows businesses to access finance for cashflow or investment purposes using an all too often unused asset on your company’s balance sheet.