Introduction to Invoice Finance

To decide whether your business is eligible for invoice finance we walk through the typical lender criteria here.

Your Business May Qualify if the Following is True

• Your company trades with other businesses i.e. B2B
• Your company offers to supply products or services on credit terms e.g. 30, 60 or 90 days.
• Company turnover is at least £100k.
• You have a reasonable spread of customers i.e. no single customer accounts for more than one third of turnover.
• Your business is a start up company.
  • Factoring services only

Your Business May Not Qualify if the Following is True

• Sales are direct to the public, commercial only sales is a mandatory requirement.
• Many invoices are issued for relatively small amounts.
• Payment disputes are a regular feature of the business sector you operate in.

Note: Some specialist lenders may accept smaller invoices, lower turnover amounts or a sales ledger dominated by a single large customer although costs may be higher.

If your company meets the trading requirements then there are two funding methods available to utilise trade debts which are "invoice factoring" and "invoice discounting".

No matter which lending option is chosen, typically businesses select invoice finance to improve cash flow. However, as well as working capital, additional benefits of invoice finance include debt collection and ledger management services plus easy credit checking of potential customers. These are valuable add-ons that can save significant amounts of time and money thereby off-setting the cost of finance!