Invoice finance is the ability to provide cash flow for your business either by factoring or invoice discounting outstanding customer invoices.
The primary difference is that a factoring arrangement manages the credit control function for you whilst invoice discounting leaves you in control of this aspect.
Factoring is often a choice for small businesses which lack sufficient resources to manage credit themselves. Invoice discounting is generally the better option for companies that have adequate resources in-house.
Invoice finance is an increasingly popular choice for business in need of cash due to its flexibility and can help a business without them having to look to bank loans or extensions to credit terms.
The capital generated by the business itself is the source of the cash received and instead of waiting 30 days or longer to be paid the business may receive up to 90% of the money due within 24 hours
Businesses large and small can benefit tremendously from increasing working capital through factoring or invoice discounting. Both can be used to generate growth for the business.
The advantages of invoice finance include:
- It can dramatically improve cash flow giving you access to invoice value within 24 hours
- You decide whether to handle your own credit control and sales management function or outsource to a dedicated team
- You unlock cash you have already earned
- You decide the level of confidentially best suited to your business needs