When it comes to invoices, we all know that some of your customers, clients, or connections will not get back to you straight away. So why should you be out of pocket for work you have already completed? Especially when you need money to keep your business and company up and running. So what can you do to resolve this issue?
Invoice finance is when a third party (lender) agrees to purchase your outstanding invoices up front in return for a fee. The lenders on our panel will provide your Business with up to 90% of the invoice value up front (less fees). After the debtor pays their invoice the remaining 10% is then sent back to you.
Your business continues to issue your invoices as normal. When the invoice is ready you send one copy to your debtor and then one copy to the lender. The lender will then agree to pay you up to 90% upfront (less fees). When the debt becomes due the lender will then complete the credit control duties and collect the outstanding monies which are owed. Once the debt is repaid the lender will then advance the remaining 10% which had been withheld at the outset. https://en.wikipedia.org/wiki/Factoring
Similar to Factoring however your business retains ownership for the credit control function and the collection of payments. The lender does not get involved with any credit control. This service is primarily undertaken on a Confidential basis without your debtor knowing that the Invoice has been funded.
Spot Invoice Finance (Factoring / Discounting)
We currently work with a number of lenders who provide Spot Invoice Finance.
This is a facility where you only fund one invoice or one debtor at a time. This type of facility is becoming more and more popular as businesses do not require a whole turnover agreement and most often would just like to pick and choose the invoices or debtors which they require funding against.
A new product to the market in which a lender will take the value of your current sales ledger and will provide funding against the whole ledger value at that moment in time.
This is a middle ground between Spot Invoice Finance and a whole turnover Factoring/Invoice Discounting agreement. We have associations with a wide range of selective and focused lenders. We can assess your case and navigate towards a solution from the best possible lender.
Over at All Star we have been involved with switching Invoice Finance facilities for over 17 years. Over this period of time the switching process has become more streamlined and is now a simple process.
Generally we have a very good relationship with many lenders in the UK. We therefore work on your behalf to make the switch over process as seamless as possible.
Many Businesses do not consider switching as it is often deemed to be a complicated and difficult process. This often leads to businesses staying with lenders for longer periods than is necessary.
If your business is looking to switch lenders we provide a FREE switching service. This includes
All we would require is for the following information to be provided.
We specialise in saving businesses £000’s off their current Invoice Finance fees.
If you are interesting in speaking with us further please give one of the team a call on 0161 8211478 or click on the link below.
If your business requires funding then we can help you find the solution.
There are no charges to yourself as our fees are covered by the lender who you choose to work with.
Invoice finance allows you to receive up to 90% of your invoice value within 24hrs. As funding is released within 24hrs you do not have to wait up to 30 or 60 days to receive payment, therefore improving cash flow.
This is a difficult question to answer as the cost is specific to each business. Typically the costs are between 1% – 5% per invoice depending on the type of facility and credit worthiness of the debtor book.
We can usually source funding of up to 90% of you invoice value, however, this is subject to a due diligence of your debtor base and the credit worthiness of your business.
This depends on you. We can source the lenders very quickly. The lenders may require information to be provided and this is where you come in. The quicker the information provided the quicker the set up process will be. An average facility is usually put in place within a week or two.
We are able to source Invoice Discounting (No credit control), Factoring (with Credit Control) and Single Invoice Finance.
Traditionally lenders wanted to fund “All or nothing” but over the years facilities have changed and you can now pick and choose the invoices which you would like funding against. These facilities can be used as and when you choose.
As there is an additional service of credit control you would expect Factoring to cost slightly more than Invoice Discounting.
There is no minimum turnover level, however, with the smaller levels of turnover this could restrict the amount of lenders who would be interested in providing funding. Just let us know what your turnover is and we can work with you to find a solution.
This is a question for the individual lender. For smaller facilities a PG is required for up to 30% of the borrowing limit. In the case of larger facilities the lender may ask you to sign a Fraud Undertaking instead of a PG.
This is uncommon for this type of lending.
The lenders which we work with transfer facilities on a regular basis and therefore the process has become far smoother than what it was like years ago.
It has never been easier to transfer facilities and each lender will work closely with you to ensure as smooth transition.
We have lenders who are able to support up to 100% exporting if this is required. We are also able to source Credit Insurance on the export debt so that you can trade internationally with a reduced risk. Get in touch and we can talk you through your options.
Yes we can. We have lenders who are now up to date with construction terms and we can source lenders who can fund your Applications for Payments or Stage Invoices. These may attract higher charges from the lender due to the risk of the debt but will provide the cash flow which you may need.
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UK Businesses only.
