Compare Invoice Finance Quotes In 5 Steps

Invoice Finance is a form of cash flow funding which allows you to borrow money against the future income of your invoices. You could immediately release up to 95% of the cash tied up in your invoices, with cash typically available within 24 hours of raising invoices.

There are two types of Invoice Finance –Factoring and Invoice Discounting. Both allow you to release cash from your invoices as soon as they are issued. The main difference between the two is the management of your sales ledger.

Under a Factoring agreement the lender will manage your sales ledger, credit control and collect payment from your customers. With Invoice Discounting the sales ledger is managed by you.

Factoring is most suited to ‘smaller’ businesses turning over less than £1 million. It could save you time and money as it provides you with a) more time to focus on sales; and b) also saves you from having to invest in expensive management systems or additional headcount.

Like all forms of commercial finance, you may be required to offer some kind of personal security. However, compared to a business loan or overdraft, less personal security is typically required as finance is secured against the future income from cash you’ve already earned.

How Factoring and Invoice Discounting work in five easy steps…

How Factoring works:

  • Step 1 – You provide a service or deliver goods to your customers.
  • Step 2 – Raise an invoice and send a copy to both your customer and Factoring lender.
  • Step 3 – The Factoring lender will advance you up to 95% of the value of your unpaid invoices.
  • Step 4 - Payment will be chased and collected by the lender.
  • Step 5 – At the end of each month the lender will return all cash collected, minus the amount of cash already advanced and any fees.

How Invoice Discounting works

  • Step 1 – You provide a service or deliver goods to your customers.
  • Step 2 – Raise an invoice and send a copy to both your customer and Invoice Discounting lender.
  • Step 3 - The lender will advance you up to 95% of the value of your unpaid invoices.
  • Step 4 – You chase and collect payment from customers.
  • Step 5 – You pay the lender an agreed monthly fee as well as an agreed percentage on the money you’ve borrowed.

Are you eligible to use Invoice Finance?

Invoice Finance is a flexible form of funding which is suitable to most businesses that raise invoices to other businesses. Your business could be suitable to use Invoice Finance if you can answer yes to the following:

  • Do you raise invoices to other businesses?
  • Are you expecting to turnover more than £50,000 in the next 12 months?
  • Do you provide credit terms of between 30-120 days?
  • Is your business based in the UK?

Finding you the best deal for your business…

Touch Financial is the largest Invoice Finance broker in the UK. We work with over 20 of the UK’s leading lenders, including high street banks, independent and boutique lenders. All of the lenders on our panel offer something slightly different, whether that’s a high advance rate, award winning service or low interest rates.

As an independent broker we’re best placed in the market to help you find the most suitable lender and a good deal. We already help over 650 customers every month, raising over £2 million in funding.

The key to our success is driven from our methodical approach to finding our customers finance:

    • We search the market – we’re partnered with over 20 of the UK’s leading lenders. We know what each lenders sweet spot is and who offers the best rates.
    • Introduce you to the most suitable lender – once we understand your business we will short list and recommend two or three lenders best suited to your requirements.
    • Help you get your money quicker – by introducing you directly to the relevant people in each lender we can help setup a facility in 14 days, the industry average is 8 weeks.
    • Provide ongoing support – our team of experts will keep in regular contact to ensure everything is running smoothly
    • We won’t charge you a penny – our expert advice is completely free and there are no hidden fees, this is possible as we receive commission upon successful introductions – much like a mortgage broker!


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