Invoice Discounting

Invoice discounting is an alternative way of drawing money against your invoices. However, your business retains control over the administration of your sales ledger. It can provide a cost-effective way for businesses to improve their cashflows. Typicfal fees are between 0.2% and 0.5%.

Invoice Factoring

Factoring provides a fast prepayment against your sales ledger. It allows you, at a cost, to flexibly increase your working capital and improve cashflow. Typical Fees are between 0.75% and 2.5% of turnover.

Factoring Prepayment

The advance against gross invoice value a funder will provide typically between 80% and 95%.

Factoring Discount Fee

Effectively the interest rate xcharged on  the money borrowed against invoices. Sometimes expressed as a percentage above LIBOR or banks standard rate. High Street banks typically charge 3.5% to 4% above basemany smaller funders operate at much lower rates.

Factoring Service Fee

The charge made on your gross turnover for administration and ruisk associated with your Factoring Finance arrangement.

Recourse factoring and non-recourse factoring

In recourse factoring, the factor does not take on the risk of bad debts. Put another way, the factor will be able to reclaim their money from you if the customer does not pay. The factoring agreement will specify how many days after the due date for payment you must refund the advance.

Concentration

Any quote for Invoice or Factoring Finance will include an agreed maximum concentration limit. This refers to the maximum percentage on single debtor can be of the total debtor book. Typically concentrations of over 20% are not fundable,

Credit protection charges

These will be levied in non-recourse factoring arrangements, where the factor is liable for any bad debts. The amount will largely depend on the factor's assessment of the level of risk.Typical charges range from 0.5 per cent of turnover to 2 per cent of turnover.

Single Invoice Discounting

Rather than a facility to Invoice Finance all your Invoices sometimes it is more appropriate to select individual invoices for Financing. Single Invoice Discounting or Spot Invoice Finance facilities provide 85% of the grosss invoice value on selected invoices only.

Spot Invoice Finance

Rather than a facility to Invoice Finance all your Invoices sometimes it is more appropriate to select individual invoices for Financing. Spot Invoice Finance facilities provide 85% of the grosss invoice value on selected invoices only. Costs vary among suppliers but are higher than a fuill factoring agreement on an individual basis but it you doont need the full facility for all invoices is a good option.