Invoice finance lets you access cash tied up in unpaid invoices. Instead of waiting weeks or months for clients to pay, you can get those funds almost immediately. This can help you cover daily expenses, pay staff, or invest in growth without taking on traditional loans.
The two most common types of invoice finance are factoring and discounting, each offering unique benefits to suit different needs.
For businesses of all sizes, cash flow is crucial. Payment delays can put pressure on operations, staff, and suppliers. Invoice finance provides a solution by turning unpaid invoices into accessible funds, helping you:
With invoice finance, you don’t have to wait for payments to keep your business moving.
There are several ways invoice finance can work, depending on your business needs:
You sell your unpaid invoices to a provider (a factor), who gives you a percentage of the invoice value upfront. They then collect the payment directly from your customer.
Factoring works well for small businesses without a credit control team or those who want to save time on payment collections.
You get an advance on unpaid invoices but continue to manage customer payments yourself. This option is more discreet, as customers aren’t aware of the arrangement.
Invoice discounting is ideal for larger businesses with reliable credit control systems.
You choose specific invoices to finance, rather than committing to all your invoices. This can help manage short-term cash flow challenges without a long-term commitment.
This is a one-off arrangement where you sell a single invoice for quick cash. It’s useful for covering unexpected expenses or filling short-term gaps.
By turning unpaid invoices into working capital, you can focus on running and growing your business.
While invoice finance is a helpful tool, it’s important to understand the downsides:
It’s worth weighing the costs and benefits to see if it’s the right fit for your business.
To find the best solution for your business:
“The Risecap team were great at responding to our needs quickly and with all the information we needed to make a proper decision!” – Svein Clouston, We Are Rationale
The agency was growing rapidly, having doubled its revenues in the previous year from £350k to £750k. While they were securing bigger clients and projects, longer delays between billing cycles created cash flow gaps, making it difficult to pay staff and suppliers on time.
That’s where Risecap came in. The agency had previously been offered a standard fixed-term loan of £100k at 21% interest over 5 years, with a personal guarantee. We sourced the same loan at a reduced rate of 17%, saving them £1,500 in arrangement fees. The loan terms allowed for monthly overpayments, giving them flexibility to reduce the debt sooner if needed. This funding supported their business development activities and ensured consistent payroll.
In addition, we secured £210k through an invoice finance product that didn’t require clients to change payment accounts. This solution avoided disruptions to client relationships while providing the cash flow needed to manage operations smoothly.
At Risecap, we believe in ethical finance that supports businesses without unnecessary stress or complexity. Our invoice finance solutions are transparent, flexible, and designed to fit your needs. Whether you need a one-off cash boost or ongoing support, our team is here to help.
Let us help you manage cash flow with confidence and focus on growing your business. Book a call now!
A professional and trustworthy partner for my clients.
Fractional CFOThey went the extra mile and provided the best rates!
Business OwnerWould highly recommend to anyone looking for commercial finance.
Business Owner25 Green Street, Mayfair, London, W1K 7AX
Risecap Ltd (Company no. 11203916) Data Protection Number ZA553906. The registered address is 3rd Floor, 86-90 Paul Street, London EC2A 4NE. Risecap is a credit broker and not a lender.
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25 Green Street London W1K 7AX
Risecap Ltd Data Protection Number ZA553906. The registered address is 85 Great Portland Street, London, England, W1W 7LT. Risecap is a credit broker and not a lender.
Copyright © 2022 Risecap. All rights reserved.
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