What is invoice finance?

Invoice finance is a powerful tool that enables small and medium-sized businesses (SMEs)  to bridge the gap between completed work and cash flow. It’s a straightforward process where you can receive an advance on your outstanding invoices, providing immediate working capital. Rather than waiting for months to collect payment, you can access funds almost instantly.

Two key elements of invoice finance can be found in invoice discounting and factoring. Both are forms of invoice finance, but they work slightly differently.

Invoice discounting is a confidential arrangement where you retain control over your sales ledger and credit control. Your business maintains the direct relationship with your customers, so they are unaware of the involvement of the finance provider. This option is ideal for a business that has a well-established credit management process in place.

On the other hand, factoring involves a more comprehensive service. The finance provider takes over the responsibility of credit control, managing your sales ledger, and collecting payments from your customers on your behalf. This can be beneficial if you prefer to focus on your core operations without the burden of chasing payments.

As specialists in finance and business growth, NACFB-accredited brokers are your trusted partners on the road to success. They understand the unique challenges your business may face and tailor their services to your specific needs.

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