Invoice Finance and Factoring for small businesses
Cash flow is sometimes a problem for small and growing businesses. Some decide to improve their cash flow, remove the stress of chasing invoice payments and the risk of bad debt, by using Invoice Finance and Factoring.
Charleston Financial has access to a broad range of providers, so you can choose the right invoice finance company for your needs.
Invoice Financing for SMEs
Invoice Finance revives business cash flow, removing the peaks and troughs and enabling better budget management and forward planning.
Invoices are one of the most flexible assets within a business – a fact which is often overlooked.
Rather than leaving funds tied up in invoices that have yet to be paid, Invoice Finance frees them with an upfront initial payment (typically up to 90% of the gross invoice value). The remainder is paid when the customer settles the invoice with the Invoice Finance provider, minus a service fee.
In this way, a business obtains the majority of the value from its invoices instantly, without having to wait for the customer to pay or spend time chasing them.
Invoice Factoring for SMEs
This is a full service facility suitable for companies who need reliable cash flow with credit control support.
Invoice Factoring can immediately release funding of up to 90% of the invoice value and get support from a dedicated credit controller, who will run your business ledger and issue customer statements.
In addition, companies concerned about non-payment of invoices can activate bad debt protection, which is also available on most Invoice Factoring accounts arranged by Charleston Financial.
Invoice Discounting for big business
Invoice Discounting is used by medium to large companies as a more flexible means of acquiring finance than traditional methods – like a business overdraft, for example.
Outstanding invoices are usually the largest asset a business owns. With Invoice Discounting, a business can borrow a percentage of the value of its sales ledger, using unpaid invoices as collateral.
This facility is funding only, differing from a factoring product as businesses require their own in-house credit control department.
Invoice Finance in practice
- Fulfil your contractual agreements for your client – for example, delivery of goods or completion of service.
- Invoice your customer as usual.
- Notify the Invoice Finance or Factoring provider by forwarding a copy of the invoice (usually electronically).
- The provider calculates available funds accordingly and permits borrowing of up to 90% of the invoice value.
- Conduct your normal credit control procedures until the invoice is paid.
If using Factoring, the provider will conduct all the necessary credit control to manage the payment of the invoice from your customer.
Typical costs range from 2.00% to 3.50% over the base interest rate.
A service fee – a percentage of turnover – is payable, confirmed on individual cases.
Apply for Invoice Finance or Factoring
To learn more about Invoice Finance or Factoring, speak directly to one of our qualified advisors on 0800 612 3167 or Apply Now