Factoring & Invoice Discount Specialists in uk

Invoice Finance

Invoice finance is a financial arrangement where a lender utilizes an unpaid invoice as collateral for funding. This allows you to swiftly access a portion of the invoice’s value, often within 24 hours.

The amount of money a provider is willing to lend you is determined by their own risk criteria.

This funding method offers access to financing for cash flow or investment needs by utilizing an often overlooked asset on your balance sheet.

There are two primary types of invoice finance:

Factoring

This enables businesses to generate funds using their outstanding invoices. The finance provider will lend you up to 90% of the invoice value and take charge of managing your sales ledger, including collecting payments directly from your customers. After deducting the costs associated with the factoring service, the provider will pay you the remaining balance.

Invoice discounting

This operates similarly to factoring, with the distinction that your business retains control over customer payments. If you utilize the funding, you will incur a fee and a discount charge comparable to interest, similar to a regular overdraft. You have the flexibility to choose whether to include specific clients or individual invoices in the invoice finance arrangement, ensuring that you only utilize the facility when it is necessary for your cash flow.

You have the option to select specific invoices to include in the invoice finance facility, ensuring that you utilize the funding only when it is necessary for your cash flow. Various specialist products, such as Construction Finance, Recruitment Finance, and Professional Services Finance, can be customized to cater to specific sectors.

Trade / Supply Chain Finance

Trade finance, in its simplest form, involves an exporter requiring an importer to make a prepayment for shipped goods. To mitigate risk, the importer requests the exporter to provide documentation proving the shipment of goods. The importer’s bank assists by issuing a letter of credit to the exporter (or the exporter’s bank), ensuring payment upon the presentation of specific documents, such as a bill of lading. The exporter’s bank may offer a loan to the exporter based on the export contract. The type of document utilized in this process depends on the transaction’s nature and the ability to demonstrate performance evidence (e.g., a bill of lading to confirm shipment). It’s important to note that banks solely deal with documents and not the actual goods, services, or performance to which the documents pertain.

Trade/Supply Chain Finance is a flexible revolving facility available for UK-based suppliers, manufacturers, as well as overseas transactions. It can accommodate deposits if required for orders and cover additional costs such as import VAT and freight, if applicable. If the transaction involves overseas trade, lenders often possess expertise in foreign exchange (FX) matters as well.