What is invoice financing and how does it work?
Invoice finance is a financial service that allows businesses to borrow money against outstanding invoices. This type of business loan is important for businesses because it helps improve cash flow. Moreover, the company gets immediate access to the funds associated with unpaid bills.
There are two main types of invoice financing:
- Invoice Factoring. By using this service, the company receives a percentage of the invoice value in advance, and the rest, minus commissions, after payment by the client. The advantage for a business is that the finance company buys its invoices and takes responsibility for collecting payments.
- Invoice Discounting. This service is the opposite of invoice factoring, because the company borrows funds against unpaid invoices, promising to return them after payment by customers. In this way, the company retains control over its invoices.
This type of financing is most suitable for businesses that have unpaid invoices and want to manage cash flow to customer payments.
On this page, you can familiarize yourself with the offers of banks and financial companies for financing invoices and choose the best terms.
Business loan calculations for 3 years (example)
| Amount, $ | Rate, % | Accrued %, $ |
| 500,000 | 8.50% | 65,521 |
| 500,000 | 8.60% | 66,292 |
| 500,000 | 8.70% | 67,063 |
| 1,000,000 | 9.50% | 146,458 |
| 1,000,000 | 9.60% | 148,000 |
| 1,000,000 | 9.70% | 149,542 |
| 2,500,000 | 10.50% | 404,688 |
| 2,500,000 | 10.60% | 408,542 |
| 2,500,000 | 10.70% | 412,396 |
| 5,000,000 | 11.50% | 886,458 |
| 5,000,000 | 11.60% | 894,167 |
| 5,000,000 | 11.70% | 901,875 |
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Details of companies offering the financial services:
Aldermore Bank
Head office’s address: Apex Plaza, Forbury Road, Reading, RG1 1AX
Phone: +44 20 7788 6699
Web-site: http://www.aldermore.co.uk/
Swift code: ALDBGB2P
Reference number: 204503
Stock code: 51WB
ABN: 00947662
BSB: ALD
Choice Business Loans
Head office’s address: C1C, Comet Studios, De Havilland Court, Penn St, Penn Street, Amersham HP7 0PX
Contact center: 01494-410-125
Web-site: https://www.choicebusinessloans.co.uk/
Metro Bank
Head office’s address: One Southampton Row, London, WC1B 5HA
Phone: +44 (034) 5080 85 00
Web-site: https://www.metrobankonline.co.uk/
Swift code: MYMBGB2L
Reference number: 488982
Stock code: MTRO
ABN: 06419578
BSB: MYMB
Royal Bank of Scotland
Head office’s address: 36 St Andrew Square, Edinburgh, EH2 2YB
Contact center: 0345-600-2230
Phone: +44 (070) 3597-88-42
Web-site: https://www.rbs.co.uk/
Swift code: ROYCGB2LCLS
Stock code: NWG
ABN: BR000548
BSB: ROYC
Skipton Business Finance
Head office’s address: The Bailey, Skipton BD23 1DN
Phone: +44 800-085-4150
Web-site: https://www.skiptonbusinessfinance.co.uk/
White Oak
Head office’s address: 58 Nicholas St, Chester CH1 2NP
Phone: +44 (0) 1244-527300
Web-site: https://whiteoakeurope.com/