Invoice Factoring - Invoice Finance | moneyfacts.co.uk

Invoice Factoring

  - Below are a selection of providers who offer an Invoice Factoring service for your business needs. Our Invoice Factoring broker service is provided by Touch Financial. To speak to an advisor, just click on a 'proceed' button, complete a short form and Touch Financial will call you to discuss your options
 
Market Invoice MarketInvoice Proceed

Types

Selective and whole-ledger, confidential and disclosed invoice finance. export supported.

Approx Min Client Turnover

£100K

Charges

All-in costs between 5% and 12% of outstanding moneys per year on confidential invoice discounting. Selective invoice finance - starts at 1% of invoice value per 30 days. No hidden fees.

Other Services

Quick to sign up via simple online application form. Flexible terms - finance one or many invoices with limits of up to £4m. Great customer service to support customers throughout the process.


Aldermore Aldermore Proceed

Types

Confidential, Recourse and non-recourse

Approx Min Client Turnover

£60K

Charges

Between 1.5% and 3% above base rate on outstanding monies advanced,plus between 0.25% and 3% of annual turnover

Other Services

A comprehensive range of tailor made cash flow solutions, including funding for new starts, Small businesses and MBOs/MBIs. Invoice discounting, Online account access available. Bad debt protection fuel cards and credit control


ABN AMRO ABN-AMRO Commercial Finance
Proceed

Types

Domestic and export recourse and non- recourse

Approx Min Client Turnover

£400K (projected or actual)

Charges

Between 1.5% and 3% above HSBC rate on outstanding monies advanced,plus from 0.35% of annual turnover or fixed fee

Other Services

Up to 90% of advance.

Factoring, invoice discounting, including fast track approach. bad debt protection, Enterprise Finance Guarantee, import, export finance and pre-approved Privilege Account. Asset based lending of up to £50m funding lines to assist growth and progressive refinancing and acquisition.


Bibby Bibby Financial Services
Proceed

Types

Recourse, non recourse, confidential, selective and export factoring

Approx Min Client Turnover

From Start-up

Charges

Up to 90% advance, Fees negotiable but typically between 1.5% and 3% over LIBOR base on outstanding monies advanced, with a service charge of between 0.5% and 3% of annual turnover

Other Services

Provides a full range of tailored funding packages including invoice finance, trade finance, bad debt protection, lease finance as well as specialist finance packages for the construction, recruitment, IT and body shop industries and many others.


Close Brothers Close Brothers Invoice Finance
Proceed

Types

Recourse and non-recourse

Approx Min Client Turnover

From Start-up

Charges

Up to 95% advance at money rates between 2% and 3% above 1 month LIBOR on outstanding monies. Service charge between 0.5% and 2% of gross annual turnover

Other Services

IDeal - unique web based invoice discounting, no monthly reconciliation, can increase funding by up to 15% and 100% bad debt protection available. Invoice discounting, factoring and international debt funding 


Hitachi Capital Hitachi Capital Invoice Finance Proceed

Types

Recourse, CHOC (customer handles own collections) and confidential

Approx Min Client Turnover

£50K

Charges

Up to 85% advanced at finance rates between 2% and 4% above base rate. Service charge between 0.25% and 3% of gross annual turnover. Low minimum fees.

Other Services

Six month trial period to demonstrate high level of customer service, full range of Invoice finance products. Same day money. Flexible sales ledger management outstanding monies and collection methods. Bad debt protection offered.


Lloyds Bank Lloyds Bank Commercial Finance
Proceed

Types

Recourse

Approx Min Client Turnover

Start-ups

Charges

Between 1.5% and 5% above Lloyds Bank base rate on outstanding monies advanced,plus an average service fee of 1.2% of sales turnover.

Other Services

Export and import services,minimum turnover £50K. New starts/MBOs. Optional credit insurance, HP, leasing payroll services.


RBS RBS Invoice Finance
Proceed

Types

Domestic and export recourse and non-recourse

Approx Min Client Turnover

£250k (Actual or Projected)

Charges

Between 1.0% and 4.5% above base rate on outstanding monies advanced, plus service charge between 0.03% & 5% of annual turnover

Other Services

Export factoring service with multi-currency capability. Import factoring service, MBOs/MBIs, acquisitions, debt restructuring and turnarounds considered. New businesses are considered.


Santander Santander Invoice Finance
Proceed

Types

Confidential & Disclosed. Recourse

Approx Min Client Turnover

From Start-up

Charges

Up to 85% advance as standard (negotiable) Between 1.75% and 3% above BOE base rate on outstanding monies Service charge between 0.5% and 3% of monthly turnover. Interest is non compounded. No charges for for faxes received or calls made on behalf of the customer.

Other Services

A comprehensive range of flexible funding solutions, tailored to meet business needs including short term cash flow, asset finance, trade finance, property and investment funding. SCB will also fund up to 50% of sales ledger of export receivables.


 

Invoice finance – is it right for your business?

Managing cashflow is crucial to keeping your business afloat, particularly for smaller firms, start-ups or those wanting to expand. But, with lending to small businesses not as forthcoming as it might be, it can sometimes be difficult to get the necessary funding to balance the books – which is why invoice finance is becoming a particularly attractive option for many SMEs.

Factoring and invoice discounting are two types of business finance that let you unlock the cash in your unpaid invoices. You’re then free to use that cash to pay your own suppliers, invoices and staff, streamlining your cashflow and keeping things running smoothly while ensuring you’re not suffering from the problems associated with late payment.

What is factoring?

Factoring is essentially where you sell your invoices to a finance provider who, in return, advances you a percentage of the value of those invoices – typically between 85% and 90%. The provider will also manage and arrange for collection of the invoices, reducing your level of admin in the process.

What are the pros and cons of factoring?

Invoice factoring can be a great way to unlock money and keep your business moving, but there are drawbacks for businesses to be aware of too.

Pros

Some customers will pay more promptly to a third party, meaning you get your invoices paid quicker by default.

Unlocks capital quickly – you can draw money as soon as you have invoiced a customer.

If cashflow isn't an issue it can be a cost effective method of reducing your overheads

If you choose non-recourse factoring your business is protected if a customer is very late in paying – or doesn't pay at all

Con

Some customers may prefer to deal with you and not a third party.

You don't collect your invoices, so how the factoring provider treats your customers will affect your future business.

You don't get the full value of your invoice – reduced profitability.

If you choose recourse factoring your business is still liable if your customers don't pay within a set timeframe (usually 120 days)

It can be difficult to end a factoring agreement. You may have to give notice of up to three months, and all monies must be paid back to the factoring provider before your business is released from the agreement

Can I keep factoring a secret from customers?

In some cases, yes. Some factoring providers will offer a 'confidential factoring' service whereby your customers don't know that your business has sold its invoices to a third party, but this might not be available with every provider.

Will I be covered for Bad debt?

With non-recourse factoring you can get "bad debt" protection included as part of the factoring agreement, so even if the customer doesn’t pay you won’t lose out financially – the factoring company shoulders the risk of bad debt so you don't need to pay any money back. However, there’s a trade-off, as opting for bad debt cover will normally be more expensive than if you had no protection.

With recourse factoring, however, you get no bad debt protection. If a customer pays too late, or not at all, you have to pay back the money you have been advanced by the provider in full, together with any associated fees and interest that may have accrued.

Invoice discounting

As an alternative to factoring, if you'd rather retain control of the management of your invoices then invoice discounting can offer a real solution. In essence, invoice discounting is much the same as factoring – there are confidential options as well as recourse or non-recourse packages, but you’re responsible for collecting the invoices – however it’s normally only available to established companies (although some providers may consider start-ups) and the minimum turnover requirements are usually higher.

Will my business be eligible for invoice finance?

Invoice finance is solely intended for B2B firms, or in other words businesses whose customers are other businesses – the likes of retailers, for example, will not usually be considered by providers.

Increasingly, providers are prepared to consider businesses from start-up although some may impose a minimum turnover which can be anything from £50K upwards, and in the case of invoice discounting you’ll probably need a lot more. To be an attractive business for a factoring or invoice discounting provider you should also not be over-reliant on a sole customer and will instead need a broad range of invoices, thereby spreading risk and ensuring a single customer isn’t in control of the entire cashflow situation – which would put the provider at risk as well as yourself.

You’ll need to have reputable customers too, as the invoice finance provider will normally look at your invoice book and may decline particular invoices, or even your entire application, if you have several customers with invoices that are more than 90 days overdue. Therefore, you should only consider factoring or invoice discounting as an option if you have few invoice disputes and have customers that pay reasonably promptly (preferably within 90 days), with your eligibility being greatly determined on the quality of your business relationships as well as the quality – and turnover – of your business itself.

 
 
 
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