What Is Invoice Factoring?
Invoice factoring, also known as invoice finance, is a finance facility whereby a funder will release to you a percentage of your sales invoice value at the point of raising your invoice, usually up to 90%. Once your invoice is then settled, they will return to you the remaining percentage, less their fee for the advance.
The funder will manage your credit control activities and collect payment for the invoices on your behalf which means more time for you to focus on your business.
Many people turn to invoicing finance as a major source of cash flow and the removal of the need to manage their sales ledger.
Benefits of Invoice Factoring Include:
- Instant cash flow
- Outsourced sales ledger & credit control function
- Cheap form of finance
- Simple to manage