Complex made easy

INVOICE FACTORING
& DISCOUNTING

When you need working capital to start or grow your business, invoice finance improves your cash flow by releasing money held within unpaid invoices

INVOICE FACTORING & DISCOUNTING

When you need working capital to start or grow your business, invoice finance improves your cash flow by releasing money held within unpaid invoices.  As your turnover increases, your invoice finance grows with you to support any additional working capital you may need.

It means you no loner have to wait the 14 to 120 days you have agreed with your customers before receiving payment, resulting in a  far improved cash flow position!

Funds can raised can be advanced for any purpose.

FACTORING

Factoring offers you short term working capital when your business needs it.

Trade customers are made aware that your invoices are with a factoring company and you are given up to 90% advance on invoices, which is released within 24 hours against outstanding trade debtor invoices.

We have direct access to lenders who will monitor and chase the debt.

Factoring is particularly valuable for growing businesses and start-ups, because it helps cash flow, and releases you from the hassle of sending statements and reminder notices.

Benefits of Invoice Financing;

  • Invoice Financing is more flexible than business loans or overdrafts
  • Decisions to lend against invoices can often be made quicker
  • The funding grows in-line with the company’s turnover
  • Typically, you get a greater level of borrowing against the assets
  • Can help to reduce the risks of late payments or defaulted invoices
Here at VIBE, our lending partners offer;
  • Clear, fast decision making
  • Straight forward terms and conditions
  • Simple and transparent pricing

HOW DOES INVOICE FINANCE WORK?

  • Clear, fast decision making
  • You then pass the invoice details to the agreed provider of invoice finance
  • 3. The provider pays you an agreed percentage (this varies per company), often within only 48 hours
  • Depending on the agreement, you will chase the payment as usual if that is necessary, or the provider will do that for you
  • You receive the remainder of the invoice amount once the invoice is paid, minus any agreed service fees

FAQs

What is the difference between Invoice Discounting and Invoice Factoring?

You will carry out payment chasing as normal (Invoice Discounting) or the invoice finance provider will take control of this part of your client relationship for you (Invoice Factoring)

Businesses we have recently helped for Invoice Financing;
  • Business to business
  • Recruitment
  • Manufacturing
  • Wholesale and Retail trade
  • Construction
  • Transportation and distribution
  • Printing
  • Export/currency
  • Aerospace
What fees and charges are involved with Invoice Financing?

The basic invoice discount and factoring charges are as below;

 

Service Charge/Fee

This fee typically covers management, collections and administration costs and is charged as a percentage of the company’s gross turnover Typical rates run at between 0.75 and 2.5%

 

Discount Charge/Fee

This is the cost of the borrowing itself – for each invoice that you receive an advance for, you’ll be charged a small finance fee (similar to the interest on a loan)

 

Similar to the interest payments on a business loan, the discount charge or fee is levied on the money you draw down. Averaging between 1% and 3% over base rate, the discount charge will be calculated daily following the advance of the money. This means you will be charged more if your customer takes longer to pay. This is quite simply to cover the time between you receiving the funds, and the finance provider receiving the funds from the cleared invoice.   

 

Discount charges are paid either weekly or monthly, depending on the preferences of the lender.

Is Invoice Financing appropriate for a Small Business?

Unlike traditional forms of finance which require established trading records and credit ratings, invoice finance is a form of alternative finance which is ideal for small businesses and start-ups.

 

In assessing risk, the factoring lender will primarily investigate the credit history of the companies owing their invoices. While preferential rates are available to businesses who do have solid credit in place, and a positive business reputation, the basic mechanism whereby factoring can improve the cash-flow cycle works exactly the same for any size of business.