How Invoice Finance works

It’s quite simple really, it’s a form of asset lending – the asset just happens to be your invoices!

  • You supply your services or products as normal.
  • You raise an invoice

    You send a copy of your invoice to your provider (it’s usually best to do this is one go, once a month)

  • The initial balance is then made available to transfer to your bank (depends on your agreement but most people opt for 85%)
  • The provider will chase the invoice when it becomes due
  • Once the invoice is paid the balance of payment becomes due (less any fees)
  • If an invoice is unpaid, is becomes ‘disallowed’ and the amount paid is taken from any outstanding invoices (as if you have never raised it).

It’s a fairly simple idea, but works really well.