From our experience of working with businesses from many sectors, here is a list of some of the common questions asked...
Will my customers think my business is in difficulties?
Is it expensive?
Is there lots of paperwork?
What percentage of my invoices are released upfront?
Do I only end up with 85 per cent of the value of my invoices?
How soon after sending an invoice can I access my money?
Do you credit check my customers?
What incentive does the invoice financier have to collect my invoices?
What if I don't want the invoice financier to chase my invoices?
How long will it take to put a facility in place?
How long are invoice finance contracts?
Many businesses worry that their customers will be concerned when they find out they are using an invoice finance provider. With over 40,000 businesses using this form of funding at all stages of their business lifecycle, there is actually no need for your customers to be worried. Many providers now offer a confidential option so your customers will be unaware of how you are funding your business.
Invoice finance is certainly cost effective compared to other types of business finance. Compared to bank funds, the cost of money advanced through invoice finance is competitive. What is often forgotten in a straight comparison of charges is that businesses using invoice finance facilities benefit from significant related savings on a number of costly overheads, such as the cost of employing a credit controller. postage, stationery and telephone calls and because invoice finance clients do not have to wait for invoices to be paid.
All financial agreements involve a certain degree of paperwork at the outset to ensure that whatever facility is offered is right for your business. Once a facility is in place an invoice finance provider will actually remove some of the administrative burden placed on your business through the management of your credit control.
As each facility is tailored to a business' own needs, this will vary. Generally though, an invoice finance facility will release anything up to 85 per cent of the value of outstanding invoices as you issue them.
No. The 85 per cent is released within 24 hours of invoices being processed, the remaining 15 per cent is held until the invoice is paid in full and is then released to you, less a small agreed fee.
This this can vary from provider to provider but typically funds can be made available within 24 hours of an invoice being received. However, some providers are able to make same day payments.
Many providers will conduct credit checks as part of the service they provide. This is especially important where one customer makes up the majority of work that you do.
The invoice financier has already advanced a percentage of the invoice value to you, so it's in their interest to collect the payment from your customer. Invoice finance teams want to achieve good results for their clients. Like any business if they fail to provide a good all-round service, their clients would be dissatisfied, and leave.
Many businesses still wish to perform their own credit control services, so if you already have a strong system in place then you may want to consider the funding-only service, which is called invoice discounting. This means you can continue to chase your customers for payment.
Typically a facility can be set up in seven to ten days, but it can be quicker, it's really down to how quickly you can provide information to your invoice financier.
Invoice finance is used on both a short term (e.g. 3 to 6 months) and long term basis, depending on the client's needs; some have used it for 10 years or more. There are some short term contracts available so businesses can test the service/facility before committing to a longer term contract.
The key part of the service we offer is to understand the needs of your business and use our experience to provide the funding partners which will support the growth and ambitions of your company.
Dave Parker on
"Fantastic service. They really knew their stuff and advised on the best possible solution for us. We are now back on track"