Whole Ledger Finance: Cash advances scales to your business
Solving cashflow slowdowns by getting you paid faster
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Scaled for your business
- Funding secured on your entire ledger
- Free up working capital
- May be used as a part of a broader funding package
- Adverse Credit – no problem
- Improved cashflow
- Reduce financial risk
- Support business growth
- No impact on other credit arrangements
- Get paid as soon as the work is done
- Funds in your bank with 24 hours
- Ideal for B2B trade
- Helps SMEs work with large corporations
Many successful businesses come up against cashflow gaps - the time between issuing an invoice and getting paid by the customer. Whole Ledger Invoice discounting can help you close the gaps by ensuring you can get paid as soon as you invoice.
This has important benefits. You no longer need to find extra funds to work through the funding gap, and you can speed up your cashflow cycle to snap up stock, replace equipment or help your business fund growth. There are various types of Invoice Finance - and one of the most effective can be Whole Ledger Finance.
What is Whole Ledger Finance?
Whole Ledger Finance provides a working capital solution that lets your business get advances on all the cash you are due from customers, without having to wait for those customers to pay.
So, rather than waiting 30 or 60 days for payment, or even longer with large corporate customers who may take months to pay, you get the funding you are owed as soon as the work is done.
Whole Turnover Invoice Discounting - how it works
Whole Turnover Invoice Discounting provides a credit facility which will be based on your whole turnover, as measured by every invoice that you issue. You raise invoices as usual and send them to your customers. At the same time, you send a copy to your finance provider to authorise payment. Depending on your arrangement, they can release 75-90% of the invoice value immediately.
When your customer pays it goes to the finance provider. Once funds have cleared, they will send you the balance, less their fee. 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.
The more work you do, and the more invoices you issue, the larger the reserve of credit you will have available for your business to use. You don’t have to draw down all the credit at one time, but what you do draw down will be replenished each time one of your customers pays an invoice.
This type of Invoice Finance does involve your whole turnover and all your customers, but it can also remain confidential. You simply issue your invoices as normal, manage your own customer relationships and chase payments, so your client base does not have to be aware that Whole Turnover Invoice Discounting is in place.
Why use Whole Turnover Invoice Discounting?
Whole Turnover Invoice Discounting can be a way of maximising your cashflow if you work in a fast-paced business, turning your entire sales ledger into a source of immediately available business finance. Instead of having your cashflow, and the future of your business, dependent on your customers and their willingness to pay, it means you can have the cash you need as you do the work and make a sale.
Invoice Discounting can, therefore, help reduce the financial risk to your business. Because cash advanced is secured on invoices you have already issued, it avoids the danger that you will fall behind with loan repayments, which can be an issue with traditional commercial finance.
With some providers, there may also be an option to combine Invoice Discounting with Bad Debt Protection. It can minimise the risk that failing customers could damage your business.
What are the advantages?
Invoice Discounting turns debtors into cash faster, and generates the maximum working capital from your sales ledger balance. The advantages to your business include:
- Improved cashflow - you no longer have to wait up to 90 days or more to get paid
- Get 90% of invoice value as soon as you bill your customers
- Cleared funds can be in your account the day after you invoice
- You retain control over your credit control – your customers will not know you are using the facility
- The level of funding you can call on will grow in relation to your level of outstanding invoices – making it ideal for funding growth
- Ideal for high-profit businesses that are growing at a rapid rate, and need the cash flow to fund additional growth
- Injects capital into your business, without having to deal with banks or sacrifice equity
Is it right for your business?
Invoice Discounting has become a major source of Working Capital Finance since the restriction of bank financing. Whole Ledger Invoice Discounting works best for companies with relatively high profit margins, since they can readily absorb the relatively high interest charges. If you operate in the business-to-business sector and have a turnover of at least £250,000 it could be a useful option, especially if you don’t have a finance team in-house and have customers who aren’t always paying on time.
REAL EXAMPLES OF WHAT WE CAN DO
Help arrange funding for a bathroom fitting company supplying a major developer
Find an arrangement for a plastics company providing an IT manufacturer
Find finance to let a shoe company fund expansion without borrowing
Source funding to support a furniture manufacturer maintain a cash reserve despite having a seasonal business
Arrange funding for a paper manufacturer providing a niche product for the fine art market
Financial solutions from Rangewell
The rates and terms offered by Invoice Discounting providers vary, and it is important to have 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. We can help source invoice discount providers who can provide solutions tailored to your sector - reducing your costs, and helping you have more funds to operate and grow your business.
Helping you build your profits
Accelerate your cashflowWhole Ledger Finance accelerates cashflow. Instead of waiting for customers to pay within their normal credit terms, you receive cash almost as soon as you issue the invoice.
A complete serviceWhole ledger finance can include credit control services, reducing the administrative burden on your team, as well as providing the funds you need.
A solution for growthInvoice Discounting can be a solution for high profit businesses that are growing at a rapid rate and need the cashflow to fund continued growth.
Reducing business riskWhole Ledger Finance provides the cash you need - but avoids the danger that you will fall behind with loan repayments as with traditional commercial finance.
FlexibleInvoice discounting is flexible. The funds available will grow or reduce in relation to your level of outstanding invoices.
FastTime is money - the faster you can bring in the money your business is owed, the more business you can do.
Download Rangewell’s free and detailed guide to Invoice Finance
The principles behind all types of Invoice Finance
Invoice Discounting and Invoice Factoring - which is right for you?
Why not all Invoice Finance providers are equal
How we can help you pay less
The downsides to Invoice Finance - and how to avoid them
How to arrange Invoice Finance - what paperwork do you need?
Key terms explained
Costs may be highInvoice Finance may have substantial fees associated with it. You would normally use it only after other forms of financing have been considered.
Suitable for high margin businessInvoice Discounting may not be suitable financing for low-margin businesses, since the interest on the debt may eliminate any prospect of earning a profit.
You must have clear title to your invoicesInvoice Discounting may be impossible if another lender already has blanket title on all company assets as collateral on a different loan.
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