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InvoiceFinanceT H E 6 T H I N G S Y O U N E E D T O K N O W
IT'S A WAY TO GET PAID QUICKLY
Invoice finance is a method of obtaining cash
advances on a business' unpaid invoices. The
business will receive a percentage of the invoice's
value upfront, meaning that they won't have to
wait the typical 3090 days to receive the money
they're owed.
IT'S A SIMPLE 3-STEP PROCESS
1. A business will send an unpaid invoice to a finance
provider
2. The finance provider will give the business a
percentage of the invoice's value right away
3. The original recipient will have the usual amount of
time to pay the invoice
INVOICE FINANCE CAN BE SPLIT INTO THREEDIFFERENT TYPES:
INVOICE FACTORING,INVOICE DISCOUNTING, &SUPPLY CHAIN FINANCE
INVOICE FACTORING
A finance provider will advance 8590% of anunpaid invoice
They'll charge the business a onetime
arrangement fee, a monthly fee, and a charge
based on the amount of funding that was
advanced
The finance provider will be responsible for
collecting the payment from the original
recipient of the invoice
Because of this, invoice factoring can be
preferred by small businesses without their
own collection teams
INVOICE DISCOUNTING
The same percentages are advanced and the
same fees are charged in invoice factoring and
invoice discounting
With invoice discounting, the business is
responsible for collecting payment, not the
finance provider
This means that invoice discounting is more
attractive to larger businesses with inhouse
collection teams
Invoice discounting can often have lower rates
than invoice factoring
SUPPLY CHAIN FINANCE
A business' supply chain is its network of
suppliers and clients
Supply chain finance is a cash advance
based on the credit rating of a business'
supply chain, rather than its own credit
rating
This means a business can often benefit
from lower rates and better terms
because of the higher credit rating of the
businesses it deals with
INVOICE FINANCE IS NOW AVAILABLE TOTHOUSANDS MORE BUSINESSES
Previously, clauses in contracts that were
meant to prevent subcontracting also made
it difficult or impossible to access invoice
finance, but new legislation from the
government has changed that. It's still
possible to prevent subcontracting, but
contracts can't restrict access to invoice
finance any more. That means that invoice
finance is now available to thousands more
businesses.
THIS PRESENTATION WAS BROUGHT TO YOU BY
FOR MORE INFORMATION ABOUT INVOICEFINANCE AND OTHER SOURCES OF FUNDING FOR
SMALL BUSINESSES, VISIT RANGEWELL.COM
