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Is Invoice Discounting worth using?

Published on 23rd October 2017 - Last update on 19th November 2019

Many businesses often trade with other businesses on credit. Whether such transactions form a portion, or even a majority, of your transactions, it means there are plenty of invoices being generated for all manner of goods and services. However, this also means a lot of money is being held back from your business until your customer or client pays. That can take time, time that you may not have. That’s why more and more business owners are choosing to finance their businesses with Invoice Discounting. In this blog, we’ll be discussing why Invoice Discounting is proving so popular and how your business could benefit, including:

  • How much can I borrow?
  • How quickly can I get an advance?
  • Do I need to use physical assets?
  • How can I use the advance?

How much can I borrow?

Lenders typically accept invoices that are worth in excess of £5,000. Because of how Invoice Discounting operates in this regard, there isn’t a set upper limit to what businesses can borrow.

That said, with Invoice Finance you could borrow up to 90% of any business to business (B2B) type invoice. The determining factors for the size of any potential advance are:

  • The overall worth of the invoice
  • The size of your business – annual turnovers of £250,000 or beyond are usually accepted.
  • How much the lender can afford.

How soon can I acquire an advance?

Until a customer has paid in full for the goods and services they may have received, your business is taking the blow. This causes stress and can put your business under great strain. However, with Invoice Discounting you could unlock funds tied up in unpaid invoices in as little as 48 hours from the moment you apply. To keep the process as streamlined as possible, you need only demonstrate that your ledgers are regularly up-to-date, can perform credit collection and possess an annual turnover in the region £250,000 or beyond.

If your business has outstanding invoices in excess of £5,000 and you need the money now, why not apply for Invoice Finance today, or visit us to see how your business could benefit?

Does my business require physical assets?

No. Although Invoice Discounting is a secured business finance product, you typically aren’t required to provide physical assets as collateral. The product is, instead, secured using your receivables, or customer repayments, as security which makes this form of alternative business finance highly accessible to developing SMEs, some of which may not possess valuable assets. However, it’s possible for some lenders to ask for physical assets as security. Some lenders might even ask for a Personal Guarantee. If you aren’t willing, or are unable, to offer any these, don’t worry. There are plenty of lenders willing to offer your business an advance in exchange for your outstanding invoices.

How can I use the advance?

As soon as an advance hits your business account, you’re free to use it in whichever way you see fit. With the advance, you can start or complete business projects, carry out refurbishments, add premises extensions or resolve concerns involving your working capital. As such, how you use the advance is entirely up to you.

Considering Invoice Discounting for your business?

Choosing the right business finance product for your business, and at a competitive rate, can be daunting. However, if you’ve got invoices worth £5,000 or more, Invoice Discounting may be what your business needs. By applying for Invoice Discounting, you’re able to take back the cash you’re owed and quickly put it to use in your business. Whether it’s to help with cash flow, clear debts or fund business projects, help is at hand. If you’re concerned about mounting unpaid invoices and need cash right away, see how Invoice Finance can help your business. Acquire the cash that’s owed to your business, apply for Invoice Finance… today.

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David Harrison

David Harrison

Content writer
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