An invoice finance company provides businesses with a facility that can turn invoices into readily available cash flow that removes the need for waiting on payment.  Having cash flow that is tied up in invoices for anything up to 60 days can be difficult for any business, especially one that is just starting out.

Credit Only

This type of facility will only be available to businesses that have credit terms with other businesses that they trade with.  There is usually a minimum amount that can be used with the factoring service an invoice finance company will offer.  There are also many companies that will offer a bad debt protection service that will prevent any bad debt affecting the collection of invoices.

Early Payment of Invoices

The invoice factoring service that is offered will allow anywhere up to 95% of the value to be received within 24 to 48 hours instead of having to wait up to 60 days or longer.  Once the payment for those invoices has been received, the remaining amount will then be released to the business.

Charging for the Service

The charges involved in this type of service are usually a few per cent of the total amount of the invoices submitted.  Each company that provides this type of service will charge differently, some will take the fees out of the remaining total once the invoices have been paid while others will calculate the fees separately.