Invoice finance, also known as invoice factoring or accounts receivable financing, is a financial solution that allows businesses to unlock the value of their outstanding invoices to access immediate working capital. Instead of waiting for customers to pay invoices on their usual credit terms (which can range from 30 to 90 days or more), businesses can sell their unpaid invoices to a finance provider at a discount in exchange for a lump sum of cash.
A confidential invoice finance facility, also known as confidential invoice discounting or confidential factoring, is a financial arrangement that allows businesses to access funding based on the value of their outstanding invoices. Unlike traditional invoice finance arrangements, where the end customer (debtor) is aware that the business is using invoice finance, a confidential invoice finance facility operates discreetly, without the debtor's knowledge.
Invoice Generation: Our clients provides goods or services to their customers and then issue an invoice for services rendered.
Invoice Submission: Our client submits the invoices to the funder, also known as the factor or financier, who assesses them for eligibility.
Funding Advance: Upon approval, the finance provider advances a percentage of the invoice value to our client, typically ranging from 70% to 90%, depending on the agreed terms.
Discreet Operation: Crucially, in a confidential invoice finance facility, the funder does not disclose its involvement to the business's customers (debtors). Our client retains control over their credit management and collections process, maintaining the relationship with their customers.
Credit Management: Our clients continue to manage their sales ledger, credit control, and collections activities. This allows them to maintain direct communication with their customers and preserve customer relationships without involving the finance provider.
Collection of Payments: When the debtor pays their invoices, they typically remit payment directly to a designated account controlled by the funder.
Reconciliation and Reporting: The Invoice Financier provides regular statements and reports to the business, detailing the status of outstanding invoices, advances, fees charged, and any other relevant financial information.
Improved Cash Flow: By accessing funds tied up in outstanding invoices, our clients can improve their cash flow and better manage their working capital requirements.
Discreet Operation: Maintaining confidentiality ensures that our clients retain control over their customer relationships and credit management processes.
Flexibility: Confidential invoice finance facilities are often more flexible than traditional lending options, as the amount of funding available to the business increases with its sales volume.
A confidential invoice finance facility provides our clients with a discreet and flexible financing solution that leverages their accounts receivable to unlock working capital, improve cash flow, and support growth initiatives.
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