Invoice Finance FAQ's

What's the difference between invoice discounting and factoring?

Factoring is a flexible funding and collections facility. Cash is advanced against your outstanding sales invoices and the facility provider arranges payment collection of the invoices. Invoice discounting is a funding only facility. It also advances funds against outstanding sales invoices, but you continue to run your sales ledger and chase your customer’s invoices for payment. It is often provided confidentially; meaning that your customers will be unaware of how you fund your business.

How quickly can invoice finance solutions be arranged?

Factoring Finance will work with you to find the facility that meets your timescales, providing information required can be supplied promptly, the process can usually be completed in a matter of a few days.

With more and more businesses turning to invoice finance as a smarter way of funding their business, the UK has the largest invoice finance market in the world with £190bn of funded debts for some 50,000 businesses (according to stats as at end of 09).

What's involved in securing an invoice finance facility?

Step 1

Factoring Finance Ltd will carry out a brief assessment of your needs and the requirements of your business, taking into consideration the nature of the industry in which you work, current performance, internal processes and your cash requirements.

This brief assessment gives the Factoring Finance Ltd the information needed to find the right funder that meets your individual requirements.

Step 2

Factoring Finance Ltd then uses the information you supply and searches through our extensive UK wide factoring and invoice discounting providers and narrows the list of possible factoring and invoice discounting providers to two or three which we conclude as being able to provide the right service for your business.
Factoring Finance Ltd then talk through these options with you, providing a thorough explanation on which finance package and funder will be right for your business.

Step 3

Factoring Finance Ltd will then facilitate suitable arrangements between you and the potential providers and will assist you at every stage to ensure you are fully informed.

Once an invoice has been raised how long does it usually take to receive the money from the invoice finance provider?

Once the invoice finance facility (invoice factoring or invoice discounting) has started you will typically receive cash advances within 24-48 hours.

What advance can I get against my ledger?

The amount of money that a funder will advance to you following receipt of your invoices is typically 75 – 85% but this varies in certain sectors and the recruitment sector dealing with temporary recruitment can expect 90 or even 100%.

What's the difference between recourse and non-recourse factoring?

Recourse factoring does not include bad debt protection. Therefore if a customer fails to pay, you will have to repay the factoring provider the amount financed against that debt. Non-recourse factoring includes bad debt protection. So, if a customer fails to pay an undisputed debt, the factoring provider will credit you with the amount of debt up to an agreed credit limit.

Alternatively, you can use can call/email us directly with your query through the contact us section.

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