Invoice Finance

Release funds tied up in your invoices within 24 hours.

Benefits of Invoice Finance

It is common knowledge that when a company invoices another, it generally takes anything from 30 days to 120 days (sometimes more) before that company receives payment from its debtor. This can have an impact on business and stop them from continuing to trade, together with stopping their progess to reach their full potential. Keeping on top of your financial management is absolutely vital for a business trying to grow and be successful. An invoice finance facility could be the key. Invoice Finance is a group of funding solutions for SMEs looking to grow, or maintain their cash flow and working capital balance. The main benefit of an Invoice Finance facility is that it massively increases your cash flow potentials. It removes the need to wait out lengthy payment terms, and ensures once work has been completed and an invoice is raised, you have those funds in your business account within 24 hours. This means once you have completed said work, you immediately gain the income. Factoring is a cash flow funding solution. It releases an agreed percentage of unpaid invoices as soon as the invoice is raised (usually within 24 hours). This percentage can be as high as 100% of the value of your invoice, although this varies dependant on multiple factors. The key factors in deciding your prepayment value are your sector, your revenue, and your business profile. There are two fees involved in Invoice Financing: the service fee, and the discount fee. These are equivalent to the interest payments in other products, such as business loans.

A Factoring facility will generally operate on a disclosed basis, meaning that the company’s debtors are aware of the providers involvement. Factoring allows for an immediate injection of cash into the business, especially if you have a large amount of money tied up in invoices at the time of application. This will increase your cashflow, allowing you to run business more smoothly. Almost all sectors and industries can access Invoice Finance facilities as long as your company trades with business to business sales via invoices.

CID (Confidential Invoice Discounting) is another of the solutions within the Invoice Finance umbrella, used for solving cashflow issues for businesses who struggle with waiting out lengthy terms of payment. With an Invoice Discounting facility, it is completely confidential, which means your customers are not disclosed to the fact that a lender is involved in the payment process. You also retain control of your sales ledger, and can send out reminders for payment yourself. There are plenty of benefits to this type of facility, such as the client having no up front information explaining the fact that an Invoice Discounting partner is involved within the payment. Aside from the confidentiality of the facility, it runs very similarly to a Factoring facility. This type of finance is only available to larger companies, as the provider will not be as involved as in others facility.

CHOCCS is also a form of Invoice Finance. CHOCCS stands for Client Handles Own Credit Control Systems. The simple difference between a CHOCCS facility and other Invoice Finance products is that you will be in charge of chasing the payments owed to you on the invoices you have financed. It simply allows you to remain in complete management of your sales ledger, and your finances. A Confidential Invoice Discounting facility is a form of Invoice Finance where the customer is completely unaware a facility is in place. Factoringworks similarly, although it is fully disclosed that a provider will be involved in the process. The CHOCCS facility is hybrid of the two meaning the customer is aware of the lenders presence in the process, although no contact is made between them. The key benefits of this product is the ability to remain in consistent contact with your clients. With other facility this relationship may begin to break down, as the facility partner will be making the consistent contact chasing for payment. CHOCCS facilties are only available to more established businesses, as you must show proof to the CHOCCS provider that you have the capability to chase your own invoices in house.

Spot Factoring is another funding solution that allows businesses to get advanced payments against the value of an invoice. This product differs from the others as it specific to singular selected invoices. Most invoice finance facilities are whole turnover, where facilities of this kind give you the ability to pick and choose invoices you need advanced. Perhaps a client has lengthier terms of payment, and it impacts your cashflow, this scenario is perfect for a spot factoring facility. This type of facility can be more expensive per invoice than a more traditional form of Invoice Financing, although we can calculate this for you to ensure you won't be overpaying for the facility, further helping you maintin your cash flow, and working capital balance.

Invoice Finance Products

Invoice Factoring

This is a funding solution tailored to your business, aimed at those who rely on payments from customers.

Confidential Invoice Discounting

Confidential Invoice Discounting is ideal for larger businesses, where the role of the lender is not disclosed to your clients.

CHOCCs

A Client Handles Own Credit Control facility enables you to continue to collect payments directly from your client.

Spot Factoring

This product allows you to pick and choose the invoices you require funding rather than a whole turnover arrangement.

Eligibility

Turnover

Unless you are a new start-up company, the minimum annual revenue most lenders will deal with is £100,000.

Trading History

Once you have filed accounts for the year, we can then apply you as a fully-fledged trading business. Start-up companies can get funding.

UK Registered Businesses

Due to us dealing with UK Based Lenders, we can only find funding solutions for UK Registered Businesses.

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FAQs

How much will an Invoice Finance facility cost?
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There are two fees involved with an Invoice Finance facility. The service fee is calculated against the companies annual revenue, and covers the cost of the lenders service for the facility, including dealing with the collection of the money owed, the administration, and the providers maintaining the company’s sales ledger. The other fee involved is the discount fee (interest) this is charged against the money the company borrows from the lender. This is charged daily, and applied monthly. The typical service fee is around 3% annually, and a standard discount fee is around 4.5% monthly. This fee is equivalent to the interest payment percentage of a business loan.

Am I eligible for an Invoice Finance facility ?
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Eligibility varies largely from lender to lender, with some much more flexible, some much less. The basic criteria for applying for an Invoice Finance facility is as follows:
£100k minimum turnover, unless you are a new start-up
1 years trading, unless you are a new start-up
UK Registered Business
If you don’t meet this criteria it isn’t the end of the road, other funding options are available, and this can be discussed with one of our consultants.

How long does it take to arrange an Invoice Finance facility ?
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Invoice Finance facilities can be completed in as short as a few days, although the process can take longer. Our aim is always to make the process as quick, and simple as possible. Navigating this process yourself can take months to complete, whereas through our direct contacts we can have it completed within a matter of days.

How much money can I get through an Invoice Finance facility ?
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Invoice Finance facilities have varying amounts of accessible funds. Rather than a monetary maximum amount of monies available, Invoice Finance is calculated by what percentage of your invoice can be advanced to your account. Most Invoice FInancing providers can advance up to 90% of your invoice value. The percentage of your invoice being advanced also depends on which industry you operate in, with some being more/less preferable.

Why JD Capital Finance?
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We are not your average broker. We strive to find you the perfect funding facility for your business, in the easiest way possible. We designate a member of our team of specialist finance consultants to you, walking you through the entire process until the funds are in your hands. We do not charge any fees for our services.

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Disclaimer: JD Capital Finance helps UK firms access business finance, working directly with businesses and their trusted advisors. We are a credit broker and do not provide loans ourselves. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. JD Capital Finance can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. JD Capital Finance may receive a commission or finder’s fee for effecting such introductions.
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