Invoice Finance Explained31st July 2015
Invoice finance is a method of obtaining cash advances on a business’ unpaid invoices. It can be broken into two distinct categories:
This involves a business passing its unpaid invoices off to a lending institution in exchange for cash. With invoice discounting the business will still be responsible for collecting payment for the invoice, while with invoice factoring that responsibility will be passed on to the lending institution.
This depends on the other companies in a business’ supply chain – its network of suppliers and clients. The business is given a cash advance on its invoices based on the higher credit rating of the other businesses in its supply chain.
Each of the many types of invoice finance is available from the wide range of lenders on Rangewell’s extensive market map of SME lending options. Rangewell provides personalised finance solutions to SMEs seeking funding and allows accountants to offer their clients the funding options that best suit their unique needs – always free of charge to qualified accountants.
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