Funding (1)
01 Mar

UK Invoice Finance: The New Way to Fund Your Business

If you’re an entrepreneur who finds it difficult to get the funding your business needs, the UK invoice finance market may be the perfect solution. Unlike other forms of finance, such as business loans or bank financing, invoice finance allows you to use your invoices as collateral to get immediate access to the funds you need.

You can then pay back these funds in small monthly installments over time, so your business has enough money available whenever it needs to purchase inventory or expand its operations. In this article, we’ll explain how invoice finance works and why it’s so beneficial for UK businesses like yours. Therefore keep reading until last to get the most useful information about this finance type.

What is Invoice Finance?

Invoice finance (or invoice factoring) is a type of asset-based lending that allows businesses to borrow money against their unpaid invoices. Invoice finance is different from traditional bank loans because it involves a company selling its receivables or invoices in advance.

This means they get paid sooner and can put the cashback into their business, rather than wait for an invoice to be paid by a customer – which could take months. When you pay off your invoice, funds are then paid straight to your supplier as agreed in your contract. All of these transactions are done electronically so there’s no need for physical delivery.

Types of Invoice Financing

There are two main types of invoice financing, also known as factoring: invoice discounting and invoice factoring. Under both models, a lender purchases invoices from you that have yet to be paid by your customers. Factoring has historically been more common in Europe than in North America, where invoice discounting is more popular; however, businesses are increasingly opting for factoring because it’s easier and faster.

With invoice factoring, you agree with your invoice financier on an advance percentage (typically 85%), which he pays to you immediately. You then present those invoices to your clients for payment—and once they’re paid, you pay back your invoice financier through wire transfer or direct deposit into his bank account. This means no delays waiting for checks to clear.

If invoice factoring sounds like something you want to explore further, get in touch with us today at Finance Hub! We’d love to help you learn more about invoice finance, how it works, and whether or not it might benefit your business.

How does it Work?

If you’re running a business, there will likely be some months where things are tight and paying your expenses on time can be difficult. Rather than worry about not being able to meet your tax bill, outsourcing company or utility payments, UK invoice finance companies can help bridge those financial gaps. Let’s take a look at how it works! Invoice financing is a service offered by invoice financing companies.

To get started, an entrepreneur will provide all their outstanding invoices to an invoice financing company like Finance Hub. The company then sells these invoices (usually in bulk) to institutional investors with an interest in high-risk, high-yield assets like invoices – meaning they receive very low returns if everything goes smoothly but face more significant losses if something does go wrong. In exchange for these higher risks, they charge a higher rate of return.

These invoice companies like Finance Hub act as intermediaries between small businesses and investors; large sums of money are loaned from institutional investors via invoice financing companies to small businesses who need to raise money quickly without going through traditional channels (such as banks). This arrangement allows small businesses easy access to fast capital, which helps them reduce debt obligations in times of cash flow problems.

What Happens Next: First, find a reputable invoice financing company based in the UK. There are many options out there, so choose one carefully. You don’t need to explore further as you’ve already explored one of the best – Finance Hub. Next, register online and send over your unpaid bills. Finance Hub reviews each invoice individually to ensure it meets its requirements before offering to fund. Once approved, funds will be transferred directly into your bank account within 24 hours after receipt of payment from customers.

Requirements and Costs

Requirements vary depending on how much funding you’re looking for and how long you need it. In most cases, all that’s required is an invoice (no matter where in Europe your business operates) and some basic financial information—after that, UK invoice finance providers – Finance Hub - will review your application. Costs vary as well; in general, however, if you want a lower interest rate or longer-term than what banks can offer you right now, invoice financing is going to be your best bet.

If you have an established company, with payment terms that allow invoice sellers to pay off their debt without needing financing, then a loan from UK invoice finance companies may not benefit you in any way. However, more than any other time in history, businesses are vulnerable due to slow cash flow caused by tight payment terms. Visit Finance Hub now to get more information on whether you’re eligible or not for this loan.

Conclusion – Come Towards Finance Hub To Get Funding Today!

If you’re a small business owner in need of funding, we can help. Finance Hub is an invoice finance service provider that provides easy financing for UK businesses. Fill out our simple form and let us get back to you as soon as possible! We provide loans from £5,000 to £20 million (paid over 1-7 years). We will run your application through one of our partners and get back to you with an answer within 24 hours!

Our expert team of experts can take care of the whole process from beginning to end and guide you on what kind of invoice finance solution will be best for your business. We aim to grow with your business providing flexible solutions throughout your growth. Our goal is not just financial; it’s about getting more entrepreneurs up and running in today’s challenging market. Contact us today to learn more.