Flexible Invoice Finance
Accelerated Finance is a leading finance broker helping businesses looking to borrow significant amounts against their invoices.
Whatever you may need invoice financing for, and however much you are looking to borrow, Accelerated Finance will help you secure competitive terms and a fast turnaround.
The Following Topics Are Covered
What is Invoice Financing?
Invoice Financing is a commercial finance product, which is used to release funds to a business, with outstanding invoices as security. Accelerated Finance can support your business in securing a facility that provides ongoing access to finance in line with your fluctuating debtor book position.
What Are The Main Uses For Invoice Finance?
Companies tend to use Invoice Financing for:
Alleviating short term cash flow issues
Negotiate payment discounts from creditors
Access Cash to secure a new opportunity
Proactive measure to manage and budget
How Does Invoice Financing Work?
Invoice Based Financing works when a lender advances a portion of your invoices in cash immediately, generally within a few working days. This gives your business working capital immediately, rather than waiting for usual payment terms of usually 30 days or more.
Depending on your lender, invoice financing works in two ways:
When your business issues new invoices to your clients or customers for the services provided, you can utilise a lender's online platform to upload the invoices raised. Lenders will then issue a proportion of the invoice to you and transfer direct to your bank account. The total amount you are paid varies but is usally around 85%- 90% of the total invoice amount.
At the time the client or customer has paid the outstanding invoice, you pocket the difference less the interest and other fees owed to the lender
The main advantage of this method is that you are in control with the lending within the business and clients and customers you work with are unaware of the lender's role and that you have borrowed money secured against the invoices.
Invoice Factoring is slightly different where the lender will essentially buy the open invoices from you. The total amount that is bought will depend on your business circumstance and the type of service/product you offer.
Similar to discounting, however a percentage will be advanced against an outstanding invoice. The customer remaining amount due to you is repaid when your client or customer pays their invoice minus any fees of interest.
The benefit of this solution if you recieve a fixed sum and will not have to make repayments to your lender. However, because your lender becomes the creditor- the lender will be paid directly by your customer or client meaning your clients will be aware of your debtor position. Your lender will also have the right to follow directly with your clients on late payments.
What Are The Costs For Invoicing?
Lenders usually work on a case by case basis with their own lending criteria and risk appetite which will affect the overall amount payable. Costs generally are dependent on your business, loan amount and the reason for borrowing.
With a stronger financial position, there is less risk that the invoices won't be paid therefore the less the facility is likely to cost. For the more complex specialist products, fees are generally higher.
How Can I Get Approved For Invoice Financing
Invoice financing can be complex and it's requirements need so be carefully understood to maximise the most out of this type of borrowing.
This type of working capital release is not a method to bypass existing issues of clients not paying on time and moving around bad debt within your business. Your business will need to have a solid balance sheet, and proof that the invoices have been paid previously against the usual payment terms which you have provided to your clients or customers.
Generally, a customer will ask for the following:
1. Financial statements and evidence that your business has no issues with collecting monies owed from invoices.
2. Demonstrate that the invoices are paid on time
3. Show that there is little history of disputes or that invoices are not written off
A lender will ask for a list of your customers and financial records for your business. In instances where there are clients who make a default on your terms, these are generally excluded from the facility.
Why Use Accelerated Finance As Your Broker For Invoice Financing?
Detail is the most important when issuing a finance request to a lender. Accelerated Finance have had many years of successfully presenting comprehensive analysis on a business and evidence to a lender to obtain the most competitive terms for clients.
Due to our outstanding expertise and knowledge of the commercial finance sector, we can match your requirements with the finance providers that will best support your business, as we have a great understanding of their products and services, this will save you time with the process.