What is Invoice Finance?

Invoice finance (or invoice factoring) is a type of asset-based lending that allows businesses to borrow money against their unpaid invoices. Invoice finance is different from traditional bank loans because it involves a company selling its receivables or invoices in advance.

This means they get paid sooner and can put the cash back into their business, rather than wait for an invoice to be paid by a customer – which could take months. When you pay off your invoice, funds are then paid straight to your supplier as agreed in your contract. All of these transactions are done electronically so there’s no need for physical delivery.

Comments

Post a Comment

Popular posts from this blog

Types of Invoice Financing

There are two main types of invoice financing , also known as factoring: invoice discounting and invoice factoring. Under both models, a lender purchases invoices from you that have yet to be paid by your customers. Factoring has historically been more common in Europe than in North America, where invoice discounting is more popular; however, businesses are increasingly opting for factoring because it’s easier and faster. With invoice factoring, you agree with your invoice financier on an advance percentage (typically 85%), which he pays to you immediately. You then present those invoices to your clients for payment—and once they’re paid, you pay back your invoice financier through wire transfer or direct deposit into his bank account. This means no delays waiting for checks to clear. If invoice factoring sounds like something you want to explore further, get in touch with us today at Finance Hub! We’d love to help you learn more about invoice finance, how it works, and whether or n...
Read more

How does it Work?

If you’re running a business , there will likely be some months where things are tight, and paying your expenses on time can be difficult. Rather than worry about not being able to meet your tax bill, outsourcing company or utility payments, UK invoice finance companies can help bridge those financial gaps. Let’s take a look at how it works! Invoice financing is a service offered by invoice financing companies. To get started, an entrepreneur will provide all their outstanding invoices to an invoice financing company like Finance Hub. The company then sells these invoices (usually in bulk) to institutional investors with an interest in high-risk, high-yield assets like invoices – meaning they receive very low returns if everything goes smoothly but face more significant losses if something does go wrong. In exchange for these higher risks, they charge a higher rate of return. These invoice companies like Finance Hub act as intermediaries between small businesses and investors; large s...
Read more

UK Invoice Finance: The New Way to Fund Your Business

  If you’re an entrepreneur who finds it difficult to get the funding your business needs, the UK invoice finance market may be the perfect solution. Unlike other forms of finance, such as business loans or bank financing, invoice finance allows you to use your invoices as collateral to get immediate access to the funds you need. You can then pay back these funds in small monthly installments over time, so your business has enough money available whenever it needs to purchase inventory or expand its operations. In this article, we’ll explain how invoice finance works and why it’s so beneficial for UK businesses like yours. Therefore keep reading until last to get the most useful information about this finance type.
Read more