Cashflow Finance Invoice Finance is a broad name used by lenders meaning factoring. Invoice Discounting and Debtor Finance are other terms used. This type of finance allows business owners to fund their unpaid invoices. Up to 90% of an invoice forwarded to you upon verification. The final 10 % is paid to you when the debtor pays less lenders fees. Below is the average price and types of invoice finance products available.
Price: Range between 2-4% per Invoice plus interest until paid.
Types of Factoring Facilities.
Where you can put in one invoice. Its our understanding that you may receive up to a maximum of 90% of the invoice upon verification the work is completed less fees. Due to its flexibility it has the highest fee charged per invoice. Single Invoice Factoring becomes very affordable with no lock in contracts. Also the availability to select your invoices you put into the facility.
Created by lenders to suit small to medium businesses. Normally these businesses are without an accounts department. Full Service Factorings provides the small business with a Credit Department and a Collection Department. In Addition an Accounts Department and Finance on invoices. Therefore the more service that is provided the more the overall costs are involved in this facility. Factoring lenders to follow up on outstanding invoices. this allows owners to work on their business not in it. Lenders conducting credit searches preventing bad debt is a must to young growing companies.
Its our consultants conclusion that this facility is formulated for businesses with a full-time booker or accountant. Fees can be dramatically reduced as your firm has procedures with payments. Partnership Factoring relies on your firm collection procedures reducing the lenders work load. As a result this facility being the cheapest in the factoring industry. Clients submit invoices and get funding only. The financier still provides credit checks and account management. The majority of the finance facility in left to the clients hands.
Are used by the larger finance firms. Banks with larger turnover clients utilise Invoice Discounting. These clients normally have accounts departments. Invoice discounting facility operates as disclosed or undisclosed. Meaning debtors you provide invoices for, are either notified or not. The basic principal applies with credit limits and debtor searches. Your firm would send in your ledger being charged a service fee. Business owners would have the availability to draw up to 80% of the ledger at request. Once funds are draw you pay commercial interest rates on those amounts until debtor pays. Basically an unsecured Overdraft against your debtors.
Selective Invoice Finance has no lock in contracts! This is often backed by real estate security. You can select which invoices to fund and how many debtor you would like to use. The funding amounts are subject to the amount of equity in your properties. Security may be high, however, this option in most cases is cheapest if used for selective funding.
Industries that use Debtor Finance
Find invoice finance products, for your industry and your business
- Transport & Storage
- Retail Trade
- Export Facilities
- Import Facilities
- New Business Owner
Finally in Addition for more information please contact Trade Debtor Finance Consultants.