Invoice finance is a widely favored option among UK businesses. Rather than enduring weeks of waiting for payment, you can receive as much as 95% of the invoice amount within just a day or two. This offers valuable liquidity and accelerates cash flow for businesses.
Are you tired of waiting for weeks or even months to get paid for your hard work? Invoice finance offers the perfect solution to streamline your cash flow and propel your company's growth.
Fast and Efficient Payments: With invoice finance, completing an order and sending a bill is all it takes to get paid within 48 hours or less. Say goodbye to lengthy payment delays and welcome a healthier cash flow that fuels your expansion plans.
Your Sales Ledger, Your Choice: Worried about confidentiality? No problem. Maintain full control of your sales ledger, keeping sensitive information in-house. Alternatively, leave the hassle of chasing payments to the finance lender, freeing up your time to focus on core business activities.
Unlock Cash from Unpaid Invoices: Don't let outstanding bills tie up your resources. Invoice finance allows you to access the cash trapped in unpaid invoices, turning them into immediate working capital. Say hello to increased liquidity and the ability to seize new opportunities as they arise.
Flexible Financing for Your Needs: Whether you need funds to fulfill a large order or purchase essential materials, invoice finance caters to your specific requirements. Embrace the flexibility it offers and make strategic decisions to elevate your business to new heights.
No More Chasing Money: Ditch the stress of chasing payments and let the finance lender handle it for you. Enjoy peace of mind as you focus on expanding your company, exploring new markets, and nurturing your customer relationships.
Embrace the power: Using invoice finance to supercharge your business's potential. Speed up your growth, maintain control, and leave behind the hassle of chasing money. Invest in your future and witness your company thrive like never before.
Invoice is suitable for many small or medium-sized companies with B2B customers as it lets businesses get paid faster, sometimes within 24 hours, as they receive a large percentage of each invoice as soon as it is raised, using their unpaid invoices as the basis for a loan or an advance.
It is a funding option for businesses that have a minimum of £30,000 annual turnover and get paid by invoice in 14 days or more. Depending on the type of product or service a company sells, and the payment terms of their invoicing, Swoop’s network of UK invoice finance lenders can provide up to 95% of invoice value.
This type of borrowing can be particularly useful for businesses that have few assets to offer as collateral for a bank loan. Their unpaid invoices are the collateral. There is usually no need for additional security.
Invoice Finance leverages your unpaid invoices as collateral, granting you swift access to a portion of their value. Typically, payment is disbursed within 48 hours of invoice submission. The funding amount can range from 75% to 95% of the total invoice value. Importantly, you retain full control of your sales ledger and remain responsible for following up with your customers for payment.
Through invoice finance, customers remit their payments to a trust account managed by the invoice financing company, designed to appear as if it's under your control. The customer remains unaware that they are paying the lender rather than directly to you. After the loan is repaid, and the lender deducts any interest and fees, the remaining balance is transferred to your bank account. In the majority of cases, the customer is oblivious to the fact that the invoice was utilized as security for a loan.
Invoice financing offers two options to suit your specific needs. You can utilize it across your entire sales ledger, or opt for selective receivables financing, where you choose specific customers and invoices to use as collateral for the loan. This flexibility allows you to tailor the financing approach according to your business requirements and cash flow management strategy.
In basic terms, invoice financing operates similarly to a revolving credit line or a set of short-term bank loans. However, unlike traditional lending options, invoice financing typically doesn't require the borrower to offer assets as collateral, and there is no need for owners or directors to provide a personal guarantee. This makes invoice financing a more accessible and flexible financing solution for businesses seeking to improve their cash flow without the burden of collateral requirements or personal guarantees.
(or invoice discounting)
(or account receivables financing)
(choosing to finance specific customer accounts)
Within these sub-types, there are further differences, such as ‘selective receivables financing’. These variances can affect the percentage of the sum of each invoice that is immediately provided, and the fees and interest charged.
However, the main difference between the two types of finance is who collects on the unpaid invoices. With invoice financing, the company borrows against their unpaid bills. They retain control of their sales ledger and are responsible for collecting unpaid sums. With invoice factoring, the company sells their sales ledger to a third-party lender (the factor), who collects the unpaid sums. Invoice financing is confidential. The company’s customers will usually remain unaware that the company is borrowing against their invoices. With invoice factoring, the company’s customers will usually know.
Invoice financing leaves you in control of your sales ledger and responsible for chasing your customers for payment. This creates less administration for the lender than invoice factoring. Accordingly, the costs are lower.
UK Invoice financing companies earn money from each transaction in two ways: by charging interest, and by charging a credit management fee. The first covers the time-use of their money, the latter covers their administration costs. Typical interest rates range from 1.5% to 3% over Bank of England base rate and are calculated daily. Credit management fees typically vary from 0.25% to 0.5% of turnover. Invoice financing costs are similar to many traditional forms of business funding, such as overdrafts and bank loans.
Owl Finance works with a wide range of invoice financing companies. Terms and costs can vary. Register with us to receive a quote for costs and services tailored to your business needs.