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How to solve year-end cashflow problems – for good

Published on 2nd December 2015 - Last update on 8th December 2019

It’s the time of year again when clients “forget” to pay their invoices. In fact, 6 in 10 invoices are paid late over the holidays. Wondering how to make the next six weeks less stressful? Invoice Finance might be the answer.

What you need to know about Invoice Finance

1. Invoice Finance is a way for businesses to get the money they’re owed more quickly, by getting a cash advance on unpaid invoices from a lender. This means you won’t have to wait the typical 30-90 days to get your money. In fact, many Invoice Finance providers can get you the capital within 24 hours.

2. Invoice Finance is a short-term method of lending. If you decide to use it, you won’t be making loan payments for months.

3. There are two types of Invoice Finance: Invoice Factoring and Invoice Discounting. They’re very similar, but there’s one important difference between them. With Invoice Factoring the lender takes over the responsibility of collecting payment on the invoice. Invoice Discounting allows the business to keep control of the entire process and collect payment themselves – meaning your client doesn’t even need to know you’re using Invoice Finance.

4. The pricing structure is fairly transparent with Invoice Finance: the lender will advance most of the invoice’s value – usually 85-90% – and charge a one-time arrangement fee, along with monthly interest and a charge based on the amount of funding they advanced.

Rangewell’s innovative online portal has mapped the entire market of SME finance in order to provide small businesses and their advisors with funding options tailored to their specific needs. If you’re interested in Invoice Finance to solve your year-end cashflow problems, we’ll use our extensive market map, comprising over 200 business lenders and thousands of loan products, to connect you to whichever option suits your situation best.

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Sarah Thornton

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