How invoice finance works in practice in the UK
By releasing funds tied up in outstanding customer invoices, factoring and invoice discounting gives you an immediate cash-injection and an ongoing supply of cash that grows in line with your sales.
Factoring - Factoring provides a funding and collections service.
- You invoice your customers for goods and services, and send details of the sales invoice to the factoring provider.
- On receipt of your invoice, the factoring provider will typically release up to 85 per cent of its value within 24 hours of it being raised. The remaining 15 per cent is held until the invoice is paid. They will undertake credit control and collections on your behalf. This includes sending out statements and chasing customers until invoices are paid.
- Your customer pays factoring provider in full.
- The factoring provider will now release the remaining 15 per cent of the invoice value, minus a small fee.
Invoice Discounting – Funding service only
- You invoice your customers for goods and services, and send details of the sales invoice to the invoice discounting provider.
- On receipt of your invoice, the invoice discounting provider will typically release up to 85 per cent of its value within 24 hours of it being raised.
- You chase payment of the invoice.
- Your customer makes payment into a dedicated trust account.
- The invoice discounting provider will now release the remaining 15 per cent of the invoice value, minus a small fee.
Further Information
For further information about invoice finance please contact the invoice finance advice team on 0800 597 4757 or apply online using the form opposite.
Invoice Finance Menu
The UK Factoring & Invoice Discounting Helpline is a leading finance brokerage specialising in factoring and invoice discounting. We offer free, independent and impartial advice on business finance options. We have been helping businesses of all sizes and commercial sectors solve cashflow problems for more that 10 years. We have found factoring and invoice discounting facilities for many thousands of businesses and remain in contact with all our clients.