Invoice finance, also known as cashflow finance, allows your business to generate money against unpaid invoices. This usually allows you to access owed funds faster, which releases cash into the business.
There are two main invoice finance options:
The finance provider will lend you an agreed percentage of the value of your invoices. The provider can also directly manage invoice collection, ideal for small businesses.
This works in a similar way to factoring but your business manages invoice collections.
Benefits of invoice finance
- Fast access to cash
- Security against losses
- Improves cashflow
- Factoring saves time – the lender will follow up on your invoices
- Reduces risk in your business
- The credit line can grow in line with your business