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Invoice financing services
Is your business suffering due to customers who make late payments and cause you a continuous cash-flow problem? If so, speak to Service Central about invoice financing.
Since 2000, there has been a 368% increase in the use of invoice financing. It is a popular and easy way to raise money.
Service Central works with a specialist panel of invoice financing providers. We can find a provider that is right for you and help guide you through the process.
Businesses do need to take care with invoice financing because, in the UK, it is not regulated by the Financial Conduct Authority. So, it is important you understand the small print and cost involved in any contract you enter.
We can get excellent service charge rates from our providers, based on the amount of business your company turns over. We can also get good discount charge percentage rates, levied on the amount of money you draw down.
There are some conditions you must meet to be eligible for invoice financing. If you trade with other businesses, are a limited company and meet specified minimum turnover criteria, then it is worth your while speaking to us.
Types of invoice financing
The two main types of invoice financing are invoice factoring and in lice discounting.
Invoice factoring is when you sell your unpaid invoices to a factoring company who will immediately pay you up to 95% of their value. The factoring company becomes responsible for collecting the debt.
Invoice discounting allows you to use the value of unpaid invoices to raise a short-term loan. The process is fast and flexible, and you remain responsible for collecting the debt from your customer. Invoice discounting is a good way to inject money into your business quickly, and you don’t require collateral.
Other types of invoice financing
Single and selective invoice financing work for businesses that mainly trade with a few customers who make very large orders but take time to settle invoices. Because the outstanding amounts can be large, waiting for payment can cause you problems with cash-flow. Single and selective invoicing allows you to raise money against one or several large invoices.
Import financing helps to bridge the gap, sometimes of several months, between paying an overseas supplier for goods for your business and them being delivered to you.
Invoice trading is a form of peer-to-peer lending in which you auction your unpaid invoices online.
Service Central can arrange all the above types of invoice financing for you. In addition, we can add bad debt provision which moves the risk of unpaid invoices to the invoice financing provider who becomes responsible for dealing with them.
The benefits of invoice financing
Today, invoice financing is used by many businesses both large and small.
Invoice financing is:
- More flexible that borrowing from the high street
- The provider makes payment quickly
- The amount you can borrow increases as your business grows, and
- Your business stops suffering the consequences of late paid invoices