Single Invoice Finance: Helping you get large invoices paid faster

They all allow businesses to get advances on the cash they are due from customers, without having to wait for those customers to pay. Instead of waiting 30 or 60 days, or even longer with large corporate customers, it can let you get the funding you need as soon as the work is done.

Some Invoice Finance solutions mean that you use all your invoices to raise cash. Single Invoice Finance provides an alternative approach - and lets you decide which invoices you use to raise the funds you need.

What is Single Invoice Finance?

Traditional Invoice Finance facilities provide funding against the entire sales ledger. Single Invoice Finance, also known as Spot Invoice Finance, allows you to release cash from individual invoices.

It is a form of finance that leaves you in control and lets you raise funds as you need them.

It allows you to raise up to 90% of the selected invoice’s value within 24 hours, providing you with a fast and effective way to access funding. It could be particularly suitable if your business has no long-term funding requirement, but may be faced with customers with high-value orders and long credit terms, which could leave you with a temporary cash flow shortfall.

How Single Invoice Financing works

Single Invoice Finance provides cash advances, with your invoices as the security, for the lending company to use as the basis for advancing you the money. They can release 75-90% (depending on your arrangement) of the invoice value immediately, with the remainder, less their costs to be released when your customer pays. With a Single Invoice Finance arrangement, you determine which invoices you wish to use as the basis for a cash advance. This lets you use the facility strategically to meet your business needs.

You can select invoices from clients you know will take a long time to pay. By getting payment immediately, you can improve your cashflow.

You can select only those invoices above a certain value, giving you increased working capital.

You can increase the numbers of invoices you select for financing, allowing you to increase funds available for growth or other specific expenses.

Being able to only select those invoices you wish to gain funding against can enable you to control cashflow, without embarking upon a longer-term contract.

The finance company earns money both from the interest rate it charges on the loan and from a monthly fee to maintain the arrangement. The amount of interest that it charges the borrower is based on the amount of funds loaned.

Benefits of Single Invoice Finance

Single Invoice Finance can reduce the financial risks your business faces. Because all cash advanced is secured on invoices you have already issued, it avoids the danger that you will fall behind with loan repayments which is always present with traditional commercial finance. It means:

• Improved cash flow with fast access to the cash you have already earned, but which is tied up in unpaid invoices - you no longer have to wait 90 days or more to get paid
• Versatile - provides a source of cash you can use as you need it
• Flexible - you won’t be committed to any funding facility or contract
• Ideal for high-value invoices or customers with long payment terms
• Funding is based on your customers’ creditworthiness – not yours
• Get 90% of invoice value as soon as you bill your customers
• Cleared funds can be in your account the day after you invoice
• Ideal for high-profit businesses that are growing and need the cash flow to fund additional growth
• Provides capital for your business, without having to sacrifice equity

Selective Invoice Discounting and Spot Factoring

Selective Invoice Discounting and Spot Factoring are both types of Single Invoice Finance, and work in a similar way. Both allow your business to assign individual invoices to a lender and receives a percentage of the funds without waiting for the end customer to pay.

Invoice Discounting lets you keep control of your sales ledger and your client relationships, while Spot Factoring will allow the lender to take control of ensuring the invoice is paid.

Is Single Invoice Finance right for your business?

Single Invoice Discounting can be effective for companies with relatively high profit margins, since they can readily absorb the higher interest charges associated with this form of financing. It can, therefore, be ideal if you have an annual turnover above £500,000 and an established credit control system in place.

Great for high-value invoices or those with long payment terms that you would not necessarily have the ability to fulfil without instant access to the cash.

Unlike bank overdrafts and traditional forms of lending, Invoice discounting is a flexible facility that grows with your business. It enables you to quickly inject capital, without having to deal with banks or sacrifice equity.

Funding is based on your customers’ creditworthiness, which can be particularly beneficial if you’re newly starting out or your business has a weak credit history.

Financial solutions from Rangewell

The rates and terms offered by invoice discount providers vary. You need expert help to get the most competitive provider for your business type, your sector and your turnover.

At Rangewell, we can use our finance expertise to support your business – and ensure that you have the financial solutions you need - from single invoice finance to purchase order finance and more. We can help source business lenders who can provide solutions tailored to your sector - reducing your costs, and helping you have more funds to operate and grow your business.