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. Where we cannot connect you directly with a provider, we offer an invoice factoring broker service provided by Touch Financial. To speak to an adviser, just click on a 'Speak to an Adviser' button, complete a short form and Touch Financial will call you to discuss your options.
 
Satago Satago Proceed

Types

Selective invoice finance

Approx Min Client Turnover

£80,000 per annum

Charges

Satago charges one simple fee, which ranges from 1% - 3% of the advance amount and is charged at a daily cost.

Other Services

A free online platform offering an invoice reminder CRM, credit risk data and flexible instant finance that that does not require a Personal Guarantee or debenture.


Market Invoice MarketInvoice Speak to an Adviser

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 Speak to an Adviser

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
Speak to an Adviser

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
Speak to an Adviser

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
Speak to an Adviser

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 Speak to an Adviser

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
Speak to an Adviser

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
Speak to an Adviser

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
Speak to an Adviser

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 factoring explained

If you’ve come to this page because you’ve heard invoice factoring is something you should consider for your business, but you’re not certain what it entails, then read on. Below we answer some of the most commonly asked questions about this form of invoice finance.

What is invoice factoring?

Invoice 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 around 85%. The provider will also manage and arrange for collection of the invoices, reducing your level of admin in the process.

The main reason to use invoice factoring is to eliminate the uncertainty of (non)payment. An invoice factoring company can pay you within 24 hours of receiving the invoice, while the business or person you are invoicing might not pay out until a month later, if ever. So, you don’t just reduce admin costs, but can also stop worrying about unpaid invoices.

As with anything, there are certain advantages and disadvantages to invoice finance. In conjunction with what’s been stated above, factoring allows you to reduce overheads and save time, allowing you to focus on growing your business. Indeed, knowing that you can rely on the income coming in through invoices and the related steady cash flow can make all the difference when it comes to planning for the future.

However, this does come at a cost, as the invoice factoring company will take a percentage as payment. Whether the costs saved from not having to chase invoices and having a reliable income stream outweigh the fee the company charges is a calculation that you will have to make for yourself. 

Unfortunately, it’s not usually possible to use a factoring company without your customers knowing they are dealing with an external company, as they will be the ones contacting customers and receiving their payments. This means that you’ll want to use a company that you can trust and embodies the same values you do, so as not to risk alienating your current customers.

What is the difference between factoring and discounting?

While both are invoice finance products, factoring differs from invoice discounting in some fundamental ways. Most importantly, discounting does not reduce your admin costs as you are simply getting an advance (usually around 80-95% of the invoice) rather than outsourcing the invoicing itself.

On the one hand, this means that you will be the only one contacting your customers, which means you can make sure you are maintaining a good relationship. They would never know anything was happening to their invoices on your side. On the other hand, you will still be losing a percentage of the invoice without reducing your own admin costs.

Which of these types of invoice finance is more suitable for your business will depend heavily on your specific situation. As usual, it would be best to compare for yourself and see what company you’d be more comfortable dealing with.

Is my business eligible for invoice factoring?

Not every invoice factoring business will have the same criteria when it comes to whether or not they are happy to do business with you. However, there are some general requirements that you can use as an indication.

First of all, your company will need to have a certain amount of turnover before invoice factoring organisations will deem you safe and profitable; this could be around £50,000 or more, depending on the firm.

Second, consider that if your business deals mainly in cash, there won’t be much to invoice. Most invoice factoring companies require you to have credit terms of between 30 and 90 days so they don’t have to wait too long, with a sufficient amount of invoices coming in (if you’re dependant on just one or two big clients, you would likely be better off with another solution anyway).

Third, these companies prefer to work with businesses whose customers are also businesses, rather than consumers, and most will likely want your customers to be based in the UK. As to what industry businesses that use invoice factoring are in, this can vary from manufacturing to professional services and many in-between – no matter what sector you’re in, if you deal with other businesses and have multiple customers, invoice factoring could be for you.

Important considerations

If you’re eligible and invoice factoring seems like it could be for you, there are a few things to think about when comparing different companies. The easiest way to compare may be by looking at the fees. Most factoring companies will take not just a percentage of the cost of the invoice, but also charge a management fee, and there may be other charges besides this.

Luckily, all the providers in the list above mention not just how much turnover they expect you to have, but also the various charges associated with their services. This should make it a lot easier to compare companies, though you’ll still always want to check the small print to make sure you know what you’re getting yourself into.

Another important question many may ask themselves is: would I be covered for bad debt? Unfortunately, a customer’s insolvency or non-payment could indeed affect your company’s credit rating. However, certain providers offer bad debt protection as an add-on to their services, which means you wouldn’t have to worry about unpaid invoices affecting your cash flow.

Note that invoice factoring could also affect your ability to obtain other types of finance, even if your credit rating isn’t affected. This is because it involves a certain amount of credit transferring, and can therefore make you seem less appealing when applying for a business loan or other type of funding.

Finally, if you’re worried about the trustworthiness of factoring companies, there are a few things you could check. Primarily, there’s the Asset Based Finance Association (ABFA), now part of UK Finance, which holds a list of all the members that have agreed to follow their common rules of conduct. If you want to make doubly sure the factoring company you’re considering is legitimate, look for them on the ABFA register.

If that’s not enough, you could contact other companies that have used the services of the provider you’re considering, or simply even look at what company your competitors may be using. While invoice factoring is not strictly a regulated activity, most businesses will be regulated by the Financial Conduct Authority due to their other activities.

What next?

If you’re looking for a different kind of business finance help, you may want to go to our business loans, property development finance, business insurance or bridging loans pages.


 
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