Invoice finance converts outstanding invoices into cash. There are two main types of Invoice finance, Invoice Discounting and Factoring, both facilities are only suitable for businesses selling on credit terms to other businesses (B2B).
The lender will provide a cash advance against some or all of your outstanding invoices. The advance is calculated as a percentage of the invoice(s) often between 70 - 95%. You have the option to draw the funds the next working day, or at a later stage, as and when required. The main benefit is that you don't have to wait for your customer to pay you, you get up to 95% of the value of the invoice made available within 24 hours.
All facilities are designed to help you access funds quickly so you can strengthen your cash flow and support future growth ambitions.
At QED Finance, one application with us, enables a full market search for your requirement. Matching you to the best and most suitable lender, not only saving you considerable time and effort, but preventing multiple credit searches on both your business and the owner/directors personally. A low credit score can limit your options or see you turned down by some lenders.
Click on the icons below to learn about each type of invoice finance facility.
Invoice Discounting
Invoice Discounting converts outstanding invoices into cash. It can help you to manage cash flow, so you can plan ahead with confidence and invest in staff, materials and equipment, while you’re waiting for customers to pay.
It’s a confidential service, so your customers will not know that you are using it.
Access upto 90% of invoice value
Receive funds typically within 24 hours
As your debtor book rises, so does the amount of cash you can realise
Invoice Discounting allows you to retain the responsibility of maintaining your sales ledger with no changes to the collection of customer payments either, you continue to do this as before.
Continue to manage your own credit control processes
Maintain customer relationships yourself
Confidential so you customers won't know you are financing invoices
Invoice Discounting is available for both UK and overseas debt in a range of currencies
At QED Finance, one application with us, enables a full market search for your requirement. Matching you to the best and most suitable lender, not only saving you considerable time and effort, but preventing multiple credit searches on both your business and the owner/directors personally.
Factoring converts outstanding invoices into cash. It can help you to manage cash flow, so you can plan ahead with confidence and invest in staff, materials and equipment, while you’re waiting for customers to pay.
It’s a not a confidential service, so your customers will know that you are using it. This is normally advised at the outset of the facility by the sending a of joint letter, from you and the Factoring company. An exception to this is called “Confidential Factoing”. This facility os offered only by a few Factoring companies in the UK.
Access up to 90% of invoice value
Receive funds typically within 24 hours
As your debtor book rises, so does the amount of cash you can realise
Factoring for can be arranged for both UK and overseas debt, in a range of different currencies
A Factoring company, takes over management of your credit control which frees up time and resource allowing you to focus on your business priorities
No need to chase payments
Factoring company manage collections sensitively and professionally
You will have full day to day support from a dedicated client manager
QED Finance, one application with us, enables a full market search for your requirement. Matching you to the best and most suitable lender, not only saving you considerable time and effort, but preventing multiple credit searches on both your business and the owner/directors personally.
Selective Invoice Finance, also known as spot factoring, selective borrowing or Single Invoice Finance, allows you to release funds early from one or multiple unpaid invoices. It’s a convenient way to boost your cash flow, without being tied into a contract. Unlike factoring or invoice discounting, selective invoice finance doesn’t require you to use your whole sales ledger or whole turnover “. Facilities are often operated by access to an online web based platform allow you to dip in and out as your cashflow requires.
Receive up to 90% of the value of your sales invoice
Fund single or multiple invoices, you choose
Fast funding in 24 hours
No long-term contracts
Selective Invoice Finance is not a confidential service, so your customers will know that you are using it. You upload the details of your customer, your customer is then allocated a credit limit by the platform. This will then enable you to upload invoices for that customer to the value of that credit limit. Selsective Invoice Finance providers will often verify that your customer has received the goods or service and that the invoice will be paid to terms. Funds are then transferred to your bank account.
So whats the downside? Nothing if you need to finance a small number of invoices per month. But, when compared to a whole turnover factoring or invoice discounting facility the rates can often be more expensive pound for pound.
At QED Finance, one application with us, enables a full market search for your requirement. Matching you to the best and most suitable lender, not only saving you considerable time and effort, but preventing multiple credit searches on both your business and the owner/directors personally.
ABL (Asset Based Lending), allows a business to borrow against various business assets, such as receivables, stock, property, plant and machinery. This type of facility is used by fast growing, mid-sized and larger companies. UK companies are increasingly looking to structured cashflow lending to drive their business growth, providing an alternative to traditional bank loans and overdrafts.
ABL Benefits + Suitability:
Need access to funding secured against multiple assets within your business
ABL can provide a flexible financing solution linked to the revolving nature of your business
ABL takes a comprehensive view of a business’s assets, the receivables, inventory, property, and plant and machinery, to optimise your working capital and financing potential
Businesses with distinct seasonality, for example where a build-up of inventory is required to support a seasonal selling period
Are looking at business driven change such as MBOs, MBIs, restructuring, mergers or acquisitions
Businesses with distinct seasonality, for example where a build-up of inventory is required to support a seasonal selling period
Restructuring existing funding arrangements
Facilities are available in multiple currencies
It’s a confidential service, so your customers won’t know that you are using it
At QED Finance, one application with us, enables a full market search for your requirement. Matching you to the best and most suitable lender, not only saving you considerable time and effort, but preventing multiple credit searches on both your business and the owner/directors personally.
Construction finance is offered by a handful of Invoice finance lenders in the UK. Construction finance releases funding by advancing cash against your uncertified applications for payment or staged invoices. It can help you to manage cash flow, so you can plan ahead with confidence and invest in staff, materials and equipment, while you’re waiting for customers to pay.
Who can use it? + How does it work?
Upload your billing to the Invoice finance provider– this can be staged invoices or applications for payment
You receive up to 80% of the value (minus fees) within 24 hours
It can be a confidential service, so your customers won’t know that you are using it
You can use this type of facility if you are a contractor or a sub-contractor in the construction sector
You have an annual sales turnover typically of £100k or upwards
At QED Finance, one application with us, enables a full market search for your requirement. Matching you to the best and most suitable lender, not only saving you considerable time and effort, but preventing multiple credit searches on both your business and the owner/directors personally.
Recruitment finance is offered by a handful of Invoice finance lenders in the UK. Recruitment Finance offers a range of benefits to your business, so you can plan ahead with confidence and invest more of your time in your business. It’s not only time it frees up, your cashflow also will see an improvement reduced the pressures whilst you’re waiting for customers to pay. Recruitment finance also assists you with payroll and credit control allowing you time to focus on finding new candidates and customers.
Who can use it? + How does it work?
Your a UK recruitment agency
Issue your customers with credit
Permanent or Temporary candidate placements
Access up to 90% of invoice value
Receive funds typically within 24 hours
As your debtor book rises, so does the amount of cash you can realise
Recruitment finance can be arranged for both UK and overseas debt, in a range of different currencies
The Recruitment finance company, provides all your back-office administration and timesheet management + takes over management of your credit control
You will have full day to day support from a dedicated client manager
At QED Finance, one application with us, enables a full market search for your requirement. Matching you to the best and most suitable lender, not only saving you considerable time and effort, but preventing multiple credit searches on both your business and the owner/directors personally.
What is the difference between invoice discounting and factoring?
Invoice Discounting
Factoring
Facility Size Available
From £10k to £50mn +
From £10k to £50mn +
Prepayment against invoices
Up to 95%
Up to 95%
How do you advise of new invoices?
Electronically and often in batched format. The facility provider will operate a running balance and won't run a mirror of your sales ledger or see the detail of each invoice
Electronically and each individual invoice. The facility provider will operate a mirror of your sales ledger. This allows them to perform credit control and send out monthly statements
Who performs credit control
You do
Factoring company / Can also be you
Will my customers know I’m financing this way?
No its a confidential facility
Yes
Most facility providers offer a disclosed facility (meaning a notice of assignment is placed on the hard copy of your invoices)
Sending of Monthly statements
You do
Factoring company
Who do my customer pay?
Your customers make payments to a trust account in your name. This is managed by the Invoice finance company
Your customers make payments direct to the Factoring company, They advise you when payments are received, so that you can update your sales ledger.
What checks will the factoring/invoice finance company make?
It’s standard practice for you to have a least one audit of your books, records and general procedures per year. This is performed by the Invoice finance company at your premises
Because the Factoring company is running a full detailed sales ledger, sending out monthly statements and chasing payments to terms. You should only get spot checks, often performed offsite remotely
What is invoice finance?
Invoice Finance is an advance secured on the basis that a receivable (invoice) will eventually be paid by the debtor (customer). The advance normally takes the form of Factoring (disclosed to customer) or Invoice Discounting (undisclosed to customer), but now has many variants.
For B2B businesses the sales ledger is often the biggest asset and therefore the easiest to borrow against. Advances against invoices are usually the easiest and most flexible way to borrow. The number of suppliers of this kind of facility means pricing is driven down by competition.
There are suitable facilities for businesses from start-ups to multi-nationals. The industry serves around 50,000 clients who now borrow over £16 billion at any one time..
Who can use invoice finance?
Facilities are available for businesses from start-ups to multi-nationals. The only determining factor is a requirement that the client is selling to other businesses on normal credit terms (generally less than 90 days). The quality of the receivable is more important than strength of the user. It is ideal for companies set on a solid growth path who need a form of finance that will grow with them.
