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Finance Guide: Selective Invoice Finance

Published on 27th April 2016 - Last update on 9th December 2019

Selective Invoice Finance shares the same basic structure as other types of Invoice Finance like Factoring and Discounting – a business will get a cash advance on its unpaid invoices, allowing it to even out cash flow or raise funds quickly. In contrast to factoring and discounting, however, with selective invoice finance the business owner can pick and choose single invoices to finance, and doesn’t have to advance funds on all the business’s outstanding invoices at once.

What makes Selective Invoice Financing different

This makes selective Invoice Finance much more flexible than other forms of Invoice Finance. The business owner can choose which invoices they want to finance and when, allowing them to work with the needs of their business as they arise, rather than financing all their invoices in one block regardless of how much funding they need. Selective Invoice Finance also frees the business from long contracts, so they don’t need to be committed to one provider for a certain period of time.

Selective Invoice Finance usually comes with higher advances, sometimes up to 100%. The fee structure can also be simpler, often consisting of a single fee, rather than Factoring and Discounting where that charge can be supplemented by fees based on a percentage of the money raised.

Providers that offer Selective Invoice Finance generally base risk on the business’s customers rather than the business itself, so it’s better suited to established businesses with a proven, creditworthy customer base. Smaller businesses without this customer base may find it harder to be approved for Selective Invoice Finance.

Making sure you have the right finance for your business is complex and can often be confusing.

There are so many options that can seem very similar, but which when reviewed closely can be very different in terms of monthly payments, overall costs, up-front fees and terms and conditions.

If you’d like to talk to one of our Business Finance Specialists:

Call us on 020 3637 2455

Or email us on [email protected]

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Sarah Thornton

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