Invoice finance is apparently not known to many businesses in the UK, but the benefits of this are becoming increasingly well known. Invoice finance is one of the largely undiscovered methods among all the possible funding options available to a company.

It is turning out to be a popular way to fund businesses as a substitute to the traditional overdraft. An invoice finance service is secured on sales invoices and will increase as your business grows unlike an overdraft that is normally secured on personal guarantees and has a rigid limit.

If you have business customers sold off on credit terms, funding will be provided against their invoices. There are services which go well with most businesses, such as new-starters or long-established ones, from £100k to £50 million turnovers, and from those with UK customers only to those trading overseas.

Invoice discounting

This is usually for companies who have good systems in place. If the company can exhibit this as being profitable, then the facility may be offered as confidential. Confidential means your customers will not know the involvement of an invoice discounting provider. Less management of the facility by the provider is needed and hence it tends to be cheaper than other alternatives.

As with factoring, which is the other alternative facility, up to 90% of the value of your outstanding invoices could be made available to you right away. Credit limits will be offered to your main debtors and you would be able to manage the funds available to you.