What is Invoice Finance?
Invoice finance is when a lender provides you with money based on what your customers owe to your business, allowing quick access to a percentage of an invoice’s value, usually within 24 hours.
Invoice finance allows you quick access to cash that is owed to your business, meaning you do not have to wait to receive payment from your customers, this is especially helpful for cash flow or investment purposes.
How does Invoice Finance work?
Invoice financing is a simple concept; rather than waiting days or weeks for invoices to be paid by your customers, we provide you with most of the value immediately! Here is a step-by-step guide on the process:
- You provide goods or a service to your customers.
- Invoice is raised and sent to the customers with Apollo assignment on.
- Invoice is sent to Apollo, who will verify this with the customers.
- Funding up to 90% is made into your bank account.
- When payment is due, Apollo will chase the customer.
- Customer pays Apollo and the remaining % is paid to you.
Types of Invoice Finance
There are two main types of invoice financing available to your business; invoice factoring and CHOCCS.
Invoice factoring allows businesses to generate money against their unpaid invoices, receiving up to 90% of the value of your invoices.
The lender will also collect payment for your invoices directly from your customers, freeing up time for your to focus on your business, instead of chasing late-paying customers.
Client Handles Own Credit Control (CHOCCS)
This is very similar to factoring, except your business handles the credit control for any payments made to your account.
5 Advantages of Invoice Finance
Access to quick cash: One of the main advantages of invoice financing is quick access to cash for your business. Payment can be made as soon as an invoice is issued, which can be used for investment, wages, and other growth.
Reduce risk to your business: If one customer is late in paying a large value invoice, it can have a significant impact on the health of the business. With invoice finance, you can make sure you receive most of the invoice’s value immediately.
Remove the hassle of chasing late payments: With invoice factoring, we have an in-house credit control team who is responsible for ensuring all payments are made to your business in the required time, freeing up your time to focus on your business.
Make business payments faster: Because of the cash flow improvements invoice finance provides, this allows you to settle your repayments faster. For example, if you’re a recruitment agency that needs to pay wages, but is waiting for the customer invoice to be paid, invoice financing is a great option to counteract this problem.
Quicker growth and development: Because you can release the funds quickly, these can be put into investing for business growth and development, in a shorter amount of time.