How to compare invoice finance quotes

How to Compare

QuotesInvoice Finance

How to Compare

Invoice FinanceQuotes

Service ChargeDiscount RateAdmin FeesLegal FeesFacility SizePre-payment or Early Payment Charge

How to compare Invoice Finance quotes

www.comparefunding.com/invoice-finance

IntroductionSo you’ve decided invoice finance is the way forward for your business to release some of the much needed working capital you have tied up in unpaid invoices, but what next?



IntroductionWell, the market is thriving which means there are many options to explore, but navigating that market and all the different lenders with their different criteria, costs and benefits, is no easy task.



IntroductionYou may already know this but comparing Invoice Finance quotes is not a straight forward task as you’re unlikely to be comparing like with like.

It’ll also depend whether you’re looking for factoring or invoice discounting. But we are going to go through some general points you should consider when getting a quote.



Company ABC

Customer XYZ

Invoice Financier

(I/F)

ABC completes goods or services, raises a sales invoice and sends it to XYZ.We’ll say it’s for £1000 for this example

1

ABC then sends the invoice to the I/F

2

The I/F makes a % of the invoice available. For example £800 3

The I/F releases the balance minus charges. £190 in this example 5

XYZ pays the whole invoice value, direct to the I/F.

4

A quick reminder: A simplified view of Invoice Finance

Areas to consider



Service ChargeThis is the percentage of each invoice that the lender will keep in exchange for the service and will vary between providers.

It is also usually subject to a monthly minimum threshold which again will vary between companies.



Discount RateThis is an annual rate applied to the funds borrowed from the facility.

Although it’s not technically interest, it works in the same way as interest rates applied to standard overdrafts.



Admin FeesAdministration or set up fees are usually charged to get a facility in place. It is generally a one-off fee and again varies widely between lenders.



Legal FeesThere could be various fees, for example, if independent legal advice is required, and security fees for registering a charge at Companies House.



Facility SizeDifferent lenders will offer different facility ceilings depending on their credit policies. So while one may be cheaper, that financer may not be able to provide you with all the cash for your needs; but a more expensive one might.



Pre-payment or Early payment ChargeThis is the general term for the amount of money a third party will advance straight away on the back of an invoice. This again varies widely depending on a lender’s appetite for risk. It could be as low as 50 per cent, or as high as 90 per cent.



Compare FundingAt Compare Funding we will search the market and find the best deal for you based on the needs of your company.

We offer our quotes for free with no obligation.

Use Compare Fundingto get an Invoice Finance

quote today


How to compare invoice finance quotes

Economy & Finance

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