Invoice financing is when you receive an invoice funding loan to take care of existing invoices. This is also called “debtor finance.” It allows you to manage short-term cash flow, pay off 100% of your invoices, and keep everything clear and simple in one place.
Don’t think of this as a traditional loan because it’s not. You’re receiving cash flow to handle outstanding invoices owed to you by your customers.
There are a few different methods for invoice funding. Invoice factoring is one of these.
As your business is still operating and invoices are coming in, you can sell the invoices to a financier and you’ll free up 80% of their value immediately. The remaining 20% is advanced per month in as little as 24 hours.
Invoice discounting is another method. This is where you receive a secured loan against your outstanding invoices to pay them off and the invoices are essentially used as the security for the loan.
You invoice the customer once they receive their goods or services with the amount owed and the date it needs to be paid.
You (the seller) then enter into an agreement with the financier to sell the invoice to them instead of waiting around for it to be paid.
Within 48 hours you access up to 80% of your funds depending on the specific transaction and you finalise the agreement and get your money.
Invoice finance offers flexibility to various businesses by allowing them to access their money right away. Funds are immediately available and all sales are converted into cash as soon as 48 hours.
Having this cash allows you to negotiate with suppliers, work in discounts, and purchase products in bulk to solidify long-term benefits. This is all possible because you know the money is coming to you through the invoice funding loan.
In some cases, it might be difficult to understand why this type of loan would be useful for anyone. If you have money and you’re a responsible business owner, you should always have the funds to take care of your business right?
That’s not always the case.
In the event of a rapidly growing business, you might not want to wait around for your invoices to be paid, especially if it could be up to 30 days until you’ll get the money.
You want to start expanding, growing, or building something new, you want the money now because it will benefit you in the long run.
If your business is restructuring or changing the way it operates in some capacity, you might need money for deposits on new suppliers, a new location, a warehouse, or a relocation. If you’re planning to do that right away, invoice funding can clear up the finances to give you the cash flow to do that while still keeping everything else running as usual.
The amount of an invoice that can be financed with an invoice funding loan can vary depending on the lender and the terms of the loan. In general, invoice funding loans can finance up to 85-90% of the total invoice amount.
This means that if you have an invoice for $10,000, you could potentially receive $8,500-$9,000 in financing through an invoice funding loan. The remaining 10-15% of the invoice amount is typically held in reserve and released to you once the customer pays the invoice in full, minus any fees or charges associated with the loan.
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Debtor Finance is also known as invoice discounting; invoice factoring; partnership factoring; disclosed invoice discounting and undisclosed invoice discounting.
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Apply for a business loanInvoice Funding – Unlock Your Cashflow Today!
We have a number of Invoice Finance options for our customers. Imagine getting paid 80% of every invoice you issue with in 48 hours? Would that dramatically help your cashflow? WHAT EXACTLY IS INVOICE FINANCE? Invoice Finance is simply the use of outstanding debtors/accounts receivable to raise working capital. Invoice finance is not a loan it is the sale of trade debts/invoices for cash to bridge the cashflow gap between the time the sale is made and when the customer…
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You can complete your business loan application either online or over the phone with us.
We will ask you to provide proof of business income and identification.
We'll work hard to ensure your business loan approval is as close to your loan preferences as possible.
With our technology, most business lenders will allow for secure digital signing of loan contracts.
Your loan funds can often be processed within one business day. It's that simple!
You can complete your business loan application either online or over the phone with us.
We will ask you to provide proof of business income and identification.
We'll work hard to ensure your business loan approval is as close to your loan preferences as possible.
With our technology, most business lenders will allow for secure digital signing of loan contracts.
Your loan funds can often be processed within one business day. It's that simple!
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Invoice funding is also known as debtor finance, invoice discounting; invoice factoring; partnership factoring; disclosed invoice discounting and undisclosed invoice discounting. It allows companies and businesses to borrow funds by using their outstanding invoices as collateral. To discuss invoice funding options today, speak to us or enquire here.
Businesses that are struggling with cash flow issues often seek invoice funding as a quick and simple solution to paying their invoices, purchasing stock, and for paying wages. An invoice funding facility allows for flexibility for a business to access funds as needed- meaning you should not be in a shortfall period for long if you have access to this type of facility. Expanding operations is easily achievable with debtor finance, due to the flexibility of these products. Speak to a lending specialist today to find out more about our invoice funding options, or enquire here!
Approval turnaround times for invoice funding can vary depending on the lender your broker has submitted your application through to. As part of the application and assessment process, your invoice funding loan specialist will outline all details of your loan options before you commit to proceeding. All lenders and banks have varying turnaround times based on the time of year, and depending on their application cues at any given moment. Your lending specialist will be able to discuss these turnaround times with you to ensure your invoice funding is secured in a time that suits your expectations. Discuss your next invoice funding facility with us, or have us call you.
Fees and charges for invoice funding are determined by each individual lender and bank. Some lenders may have higher establishment fees, but offer a lower interest rate product. Meanwhile, others can offer higher interest rates, but lower establishment and facility maintenance fees. We’re experienced in obtaining invoice funding, and will be able to outline all details of the commercial products that you qualify for. Give us a call today, or have us call you!
Yes! Invoice funding is frequently obtained by small and medium-sized enterprises (SMEs). Invoice funding can help overcome cash flow challenges caused by delayed customer payments. It can also allow small and medium sized businesses to access funds based on their sales, rather than relying on traditional collateral or other loan approval processes. Having a tailored invoice funding solution available is important to ensure the right product for your small or medium sized business. The lending specialists at Fox Finance Group are professionals in assessing and negotiating on their clients behalf to ensure they obtain the most competitive loan approval for their small business clients. Speak to a lending specialist today, or enquire online for your next invoice funding solution.
