1. Enquiry stage
    This gives the invoice finance provider an opportunity to capture some basic information and gain a better understanding of how your business operates, and evaluates your requirements to see if you can benefit from an invoice finance service.
  2. Sales manager call/visit
    The invoice finance provider will come and talk to you about your business, undertake a short business health-check, and gather some documents so that an offer can be made.

To build as complete a picture of your business as possible,
the financier will look at:

  • The financial picture – invoice financiers will typically look at actual and forecasted turnover, profit and loss, and net worth. Don’t worry if some of these elements are negative, an invoice financier may still be able to help.
  • How your business trades – one of the main reasons for non payment will be a dispute over the invoice. An invoice finance provider will look to understand the paper trail such as order confirmations, proof of delivery, time sheets and good communication of clearly defined payment terms. If you do not have these in place, some invoice financiers can make recommendations for best practice.
  • Your key customers – any invoice finance provider will want to know details of your customers to assess their credit worthiness. This allows the level of funding to be determined correctly.
  • The management team – an invoice financier will want to understand more about the owners – qualifications, experience, history of previous business failures etc. Any previous failure on the part of a director are not necessarily a bar to eligibility, many invoice financiers support those who have been the victim of a failed business in the past.
  • Other sources of finance – the invoice financier will want to understand if any other funders are supporting your business. They will need to register their interest in the book debt at company’s house allowing them to be the sole funder of your invoices. This is known as a debenture.

To move to the next stage some paperwork will also be needed from you:

  • Data protection form – allows searches to be taken against the individuals listed.
  • Proof of ID – such as driving licence or passport.
  • Sales/debtor ledger – searches may be undertaken, for internal use only, on your customers with external agencies to establish credit worthiness and the amount of funding
  1. The Offer
    This can be written or verbal and may be made whilst the manager is on their visit.
    The offer will outline:

    1. The facility being offered
    2. How much money can be made available
    3. How much the facility will cost
    4. What documentation will be required to get the facility up and running.
    5. The personal guarantees required – this is a standard request for most types of finance and is a commitment by you and assurance to the invoice finance provider, that the signed agreement will be honoured by you.

On your acceptance the invoice financier will then process the application so that facility documents/legal documents can be raised.

  1. Setting up the facility
    • Once the relevant documentation is signed, the following will take place:
    • Facility documents are processed onto system by the invoice financier.
    • The debenture is registered.
    • Details of your customer accounts are set up on the system – this can sometimes be migrated automatically from your accounting system, depending on the system used.
    • Invoice verification will take place. This is essentially an audit of the sales ledger. The invoice financier will speak to your customers – this allows them to reconcile your account, (this can be done in a confidential or disclosed basis). The invoice financier will address any disputes or issues that may arise and can help you to resolve if there is a problem.
    • The more invoices that are reconciled, the more funding that can be made available. Sometimes the offer from the invoice financier will change based on the successful reconciliation of invoices.
    • The agreement will outline costs; the standard terms and conditions of the facility, how much money will be made available, how it will be run, and the terms of working together.

Once the contract is signed the facility will then be set up. Remember to seek advice/guidance before signing any documentation.

For more information and to compare invoice finance quotes please call 0800 597 4757 or apply online.