Invoice Financing


Invoice Financing

 Invoice Financing and the way it can Benefit Business Cash Flow 



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What is Invoice Financing?

Invoice financing is a common term to explain a variety of asset-based finance facilities, where the businesses sell their assets (invoices) to a 3rd party for a percentage of their value. It is a beneficial financing tool for businesses whose growth is affected by the slow payment of invoices.

Accounts receivables expenditure companies allow the borrower cash collateralized by the business’s outstanding statements — giving the borrower an admirable method of putting more finance into the business directly. With invoice financing, the borrower can easily get a lively advance of about 85% of a number of his statements, with most of the other 15% paid to him in the future. It’s thus the right addition to cover for late-paying customers or the cash flow deceleration.

 

Types of Invoice Finance:

There are two main kinds of Invoice finance and they are: 

1. Invoice Factoring: In an invoice factoring, a business sells its assets (invoice) to a 3rd party (called a factor) at a discount. 
2. Invoice Discounting: It is the practice implemented for employing a company’s due accounts received as collateral for a loan purpose.

Requirements & Eligibility:

Some basic requirements for invoice finance are as following: 

  • Your business trades with other businesses (not consumers) 
  • You are a Ltd. company or LLP.
  • You offer industry standard credit terms 
  • Few of the  lenders have a minimum invoice per month sent per month requirement
  • A particular Minimum turnover 

How Does Invoice Finance Work?

  1. You continue your business as was common and invoice your clients/customers 
  2. You then pass the invoice details to the agreed provider of invoice finance. 
  3. The provider pays you an agreed percentage (this varies per company), often within only 48 hours. 
  4. Depending on the agreement, you’ll chase the payment as was common if that’s necessary, or the provider will do this for you. 
  5. You receive the rest of the invoice amount once the invoice is paid, minus any agreed service fees.
Working of Invoice Financing

Benefits of Invoice Finance

  • It’s more flexible than overdrafts or business loans. 
  • Decisions to lend against invoices may often be done quicker. 
  • The funding grows in-line with the company’s turnover. 
  • Normally, you get a higher level of borrowing against the assets. 
  • Can help to scale back the risks of late payments or defaulted invoices

Working Process

Make Enquiry

Share your Contact Details and receive a free consultation.

Make Payment

Make Online or Offline Payment for your Order.

Submit Documents

Submit documents for your order using an online dashboard.

Work Completed

Work will be completed by us and updates delivered online.


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