Cashflow Solutions – Invoice Finance – Recruitment Finance – Supplier Finance – Payroll Finance
What Would You Do If You Had More Working Capital?[Video not found]
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Cashflow Solutions including Factoring and Invoice Discounting are collectively known as ‘Invoice Finance’ but are often just referred to as ‘factoring’, though they are distinct products
Factoring – also known as ‘debt factoring’ – involves selling your invoices to a third party. In return they will process the invoices and allow you to draw funds against the money owed to your business. Essentially, these companies provide a finance, debt collection and ledger management service. It is commonly used by businesses to improve cash-flow but can also be used to reduce ‘sales ledger administration’ overheads.
Invoice Discounting is an alternative way of drawing money against your invoices. However, your business retains control over the administration of your sales ledger. As well as providing finance, it offers valuable support services and credit insurance.
For many businesses, outstanding sales invoices are the largest asset with up to one quarter of an annual turnover remaining unpaid at any one time. This “locked up” cash can greatly impact the growth potential of a business and may sometimes force a business into insolvency.
Available to the majority of businesses who have credit sales to commercial buyers – including start ups – an invoice finance solution is not dependent on historical financial performance and therefore provides an easily accessible means of financing growth, particularly for new start businesses.
Invoice Finance enables you to confidentially raise funding from your unpaid invoices without waiting 30, 60 or 90 days to be paid by your customer.
Invoice Finance and Discounting with The Aftersales Network delivers improved cash-flow, offers the option to protect your business from bad debt and supports you with quality service from a personal Relationship Manager – while you continue to take responsibility for credit control in-house.
How does Invoice Finance work?
With Invoice Finance, as soon as you have raised an invoice with a customer, the lender will release a percentage of the total value of the invoice within 24 hours, bridging the cash flow gap between raising an invoice and getting paid.
Your own credit controller secures payment from your customer, which is then paid in to your client account at the lender. (With ‘Confidential Invoice Discounting’ your customer has no idea that anyone else is involved.)
Once the customer honours the invoice, the lender will give you the remainder of the invoice value, minus a small service fee.
Invoice Discounting is ideal for businesses with a turnover greater than £500,000 that want to retain control of their own collections and that already have strong credit control systems in place.
The benefits of Invoice Finance include:
- Fast access to finance
- Improved cash-flow: you no longer have to wait up to 90 days to get paid
- It’s confidential – your customers will never know
- Typically up to 95% of invoice value available when you bill your customers
- The option to combine with Bad Debt Protection to minimise the risk
- Cleared funds can be in your account the day after you raise your invoice
- You retain control over your credit control function
- The potential to raise even more money through our fantastic range of additional services
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