The effects of COVID-19 on S.M.E businesses across the UK has been profound, so let’s be clear, if you’re a business owner worrying about how the market uncertainty is impacting on your business already, or may in the future, you are not alone!
We’ve been assisting lots of clients new and old, who are confused about what funding is available to their business. We thought putting together a series of summaries around the various financial products available to businesses would be a fantastic way to give something back.
This document focuses on invoice finance, you may be aware of how these facilities work. If not, we’ll help answer the question; “What is Invoice Finance?”.
Invoice Financiers use unpaid invoices as security for providing funding. Approved businesses access a percentage of an invoice’s value, typically 85 or 90% and quickly; sometimes within 24 hours. The amount of funding given is based on the risk appetite of the Finance provider.
Invoice Finance is growing in popularity among UK SMEs, particularly those with long cash collection cycles like construction, manufacturing and recruitment.
There are two main types of Invoice Finance, Factoring and Invoice Discounting:
There are also a few different ways you can finance your debtor book within the two above structures, as illustrated below.
A question to ask yourself is “How much cash have I got stuck in my debtor book, could having access to 85% or 90% of that capital help my business?”
If you’d like to arrange a no obligation exploratory call to discuss, please get in touch.
Helping Businesses Source the Finance They Need to Grow
A Commercial Finance Broker with over 20 years experience in the SME sector working in senior…
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