Benefits of Invoice Discounting

By David Harrison
Content writer
Last update: 19 November 20191 minute read
Benefits of Invoice Discounting

Table of Contents

Is your cash locked up in unpaid invoices? Do you need to get hold of cash fast? Perhaps Invoice Discounting can help you release the funds your business needs? If you’ve got outstanding invoices worth in excess of £5,000, you can release these funds and use them in and around your business in whichever way you see fit. An increasingly popular method of business finance, more and more SME owners are choosing Invoice Discounting and reaping the benefits. In this blog we’ll answer the following questions on Invoice Discounting:

  • Does invoice discounting require me to use assets as security?
  • Do my customers know if I’m using Invoice Discounting?
  • How much cash could I release?
  • Will I have access to additional services?

Is Invoice Discounting secured?

Yes, but typically not through physical assets such as your home or essential business equipment. Instead, lenders secure the product by using the money owed to your business as stated in the invoice, also referred to as your receivables. As such, this makes it a great product for developing businesses that may not possess high-value physical assets.

However, it’s also possible that some lenders could ask for physical assets for security, or even request a Personal Guarantee. If you’re unable, or unwilling, to offer any of these, know that there are plenty of other lenders waiting to strike a deal with your business.

If your business possesses invoices in excess of £5,000 and you need the funds now, why not apply for Invoice Finance today, or find out here how your business could benefit?

Will the customer know I’m using an Invoice Discounting provider?

No, unless you decide to tell them of course. By keeping the arrangement confidential, your position and authority as the credit controller aren’t affected. So, you and your staff can continue to perform credit collection duties without any interference, ensuring that payments are forthcoming.

How much cash can I acquire?

That depends on the size of your business and the chosen lender. As a rule, lenders typically accept invoices that are of a minimum value of £5,000. However, because cash advances are based on a percentage, usually up to 80% of the value of the invoice, there isn’t a fixed upper limit. So if you’ve got invoices worth £5,000, £50,000 or even £5 million, all that matters here is finding a lender who is willing and able to lend.

How soon can I get access to the funds requested?

In some cases, it possible to receive an advance in as little as 48 hours. The benefit of this is that you aren’t made to wait weeks, or even months, for your customer or client to pay up, so you’re able to support your business’ finances and fund projects whilst conducting credit collection.

Will I have access to additional services?

This depends on the lender. Some lenders may be able to offer you access to a variety of additional services. These could range from ledger services and back-end payroll support to advice. Should you decide to make use of any these services it could help you save time and offer ideas for the future of your business, for a fee. As such, when approaching lenders, ask to see what other services they can offer, if you feel they could prove beneficial.

Thinking about applying for Invoice Finance for your business?

If you’ve got unpaid invoices worth over £5,000, you could be sitting upon essential funding opportunities without even realising it. Whether it’s to help your cash flow, clear debts or fund business projects, Invoice Finance could be the answer to your current predicament. But when searching for any sort of finance for your business it can tricky and consume valuable time. However, you don’t need to go it alone. If you’re concerned about mounting unpaid invoices and need cash right away, apply or see how Invoice Finance can help your business today!

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