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Invoice Finance
A great solution to boost cashflow for businesses with long payment terms on their invoices.
(Sometimes also referred to as Invoice Discounting).
Unlock money tied up in invoices that your customers are yet to pay. It's like bringing future cash owed to you, into your bank account today.
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Trade with customers, and raise your invoices with payment terms.
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Borrow against outstanding invoices, instead of having to wait 30/60/90 days for payment.
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When your customer pays, the amount borrowed is returned to the lender.
Get expert advice on how Invoice Finance can work for your business - speak to NorthFunding today.
Selective Invoice Finance
INVOICE
Selective Invoice Finance is a simple, pay-as-you-go version of invoice finance, where you only borrow against a select number of invoices, that you decide.
It's great for businesses looking to fund a smaller amount of invoices, often used when there's only a few clients/invoices that put pressure on cashflow (either due to long payment terms, or large invoice amounts).
Typical funding amounts?
Depends on the size of your invoices.
(Lenders often have minimum/maximum invoice sizes).
Repayments?
Depends on the size of your invoices and agreed credit limits.
Lenders often accept up to 90 day payment terms, and usually charge extra for late payments from customers.
Fees?
There is usually a service fee, and an interest/discount fee, charged against funded invoices. Some bundle this into one fee.
APRs are usually higher, but if only funding a small amount of invoices, this can be the most cost effective solution.
Eligibility & Security?
Businesses must raise invoices in arrears (only when work is complete).
Lenders will usually need a stable trading history, with good credit control. Strong customers are preferred, as your invoices approval/validity will often need confirming by your client before the lender advances funds.
Director guarantees are usually required, sometimes Company Debentures also.
Confidential Invoice Discounting (CID)
With CID, you commit to a lender for 12 months, and your invoices are funded confidentially (so your customer isn't required to confirm any approval of your invoices).
It's a good option for businesses that need funding for the majority of their invoices over a longer term period, as it guarantees regular funding to boost cashflow, whilst not having to disclose anything to your customers.
Typical funding amounts?
Depends on the size of your invoices and agreed credit limits.
(A minimum monthly fee is sometimes applied if only funding small amounts).
Repayments?
Depends on customer payment terms.
Lenders often accept up to 90 day payment terms, and usually charge extra for late payments from customers.
Fees?
There's usually a service fee, an interest/discount fee charged against funded invoices, and sometimes monthly minimums.
APRs are usually lower than for Selective Invoice Finance, but you're committing to these fees for the next 12 months.
Eligibility?
Businesses must raise invoices in arrears (only when work is complete).
Lenders will usually need a stable trading history, with good credit control and strong debtors.
Director guarantees & Company Debentures are usually required.
INVOICE
Factoring
INVOICE
Factoring is a an invoice finance solution that involves selling your entire invoicing process to the lender. The lender will often require you to then raise invoices via their systems, which they will fund, and then collect on those invoices (as per your agreed payment terms). It's not confidential like CID, but it includes accounts receivables processes, credit control, and often credit insurance too.
Factoring is perfect for businesses looking to fund all invoices over the next 12 months, and also for those looking to outsource raising and collecting of invoices.
Typical funding amounts?
Depends on the size of your invoices and agreed credit limits.
Repayments?
Depends on customer payment terms.
Lenders often accept up to 90 day payment terms, and usually charge extra for late payments from customers.
Fees?
Similar to CID, the main fees are a service fee & an interest/discount fee charged against funded invoices. There can also be a variety of add-on fees charged depending on the additional services included.
Eligibility?
Businesses must raise invoices in arrears (only when work is complete).
Even though the lender will be manging your accounts receivables (invoice processes), they'll still look for a stable trading history and strong debtors.
Director Guarantees & Company Debentures are required.