How Invoice Finance Can Transform Your Cash Flow

For many SMEs, outstanding invoices represent their largest asset. Yet waiting 30, 60 or even 90 days for payment can create serious cash flow challenges. Invoice finance solves this problem by releasing up to 90% of the value of your invoices within 24 hours of issuing them. The remaining balance, minus a small service fee, is paid once your customer settles the invoice. There are two main types: factoring (where the provider also manages your sales ledger and collections) and invoice discounting (where you maintain control of your own credit management). Costs typically range from 0.6-3% of turnover for the service charge, plus interest on funds drawn at rates comparable to bank overdraft rates. The key benefit is that your funding grows with your sales. As your business grows, so does the amount of finance available to you.