How to compare invoice finance quotes


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How to compare invoice finance quotes

  1. 1. How to CompareQuotesInvoice Finance
  2. 2. How to CompareInvoice FinanceQuotesService ChargeDiscount RateAdmin FeesLegal FeesFacility SizePre-payment or Early Payment Charge
  3. 3. How to compare Invoice Finance you’ve decided invoice finance is the wayforward for your business to release some of themuch needed working capital you have tied up inunpaid invoices, but what next?
  4. 4. How to compare Invoice Finance, the market is thriving which means there aremany options to explore, but navigating thatmarket and all the different lenders with theirdifferent criteria, costs and benefits, is no easytask.
  5. 5. How to compare Invoice Finance may already know this but comparing InvoiceFinance quotes is not a straight forward task asyou’re unlikely to be comparing like with like.It’ll also depend whether you’re looking forfactoring or invoice discounting. But we are goingto go through some general points you shouldconsider when getting a quote.
  6. 6. How to compare Invoice Finance completes goods orservices, raises a salesinvoice and sends it toXYZ.We’ll say it’s for £1000for this example1ABC then sends theinvoice to the I/F2The I/F makes a% of the invoiceavailable. Forexample £800 3The I/F releasesthe balanceminus charges.£190 in thisexample 5XYZ pays the wholeinvoice value, direct to the I/F.4A quick reminder:A simplified view ofInvoice Finance
  7. 7. Areas to consider
  8. 8. How to compare Invoice Finance ChargeThis is the percentage of each invoice that thelender will keep in exchange for the service andwill vary between providers.It is also usually subject to a monthly minimumthreshold which again will vary betweencompanies.
  9. 9. How to compare Invoice Finance RateThis is an annual rate applied to the fundsborrowed from the facility.Although it’s not technically interest, it works in thesame way as interest rates applied to standardoverdrafts.
  10. 10. How to compare Invoice Finance FeesAdministration or set up fees are usually chargedto get a facility in place. It is generally a one-off feeand again varies widely between lenders.
  11. 11. How to compare Invoice Finance FeesThere could be various fees, for example, ifindependent legal advice is required, and securityfees for registering a charge at Companies House.
  12. 12. How to compare Invoice Finance SizeDifferent lenders will offer different facility ceilingsdepending on their credit policies. So while onemay be cheaper, that financer may not be able toprovide you with all the cash for your needs; but amore expensive one might.
  13. 13. How to compare Invoice Finance or Early paymentChargeThis is the general term for the amount of money athird party will advance straight away on the backof an invoice. This again varies widely dependingon a lender’s appetite for risk. It could be as low as50 per cent, or as high as 90 per cent.
  14. 14. How to compare Invoice Finance FundingAt Compare Funding we will search the marketand find the best deal for you based on the needsof your company.We offer our quotes for free with no obligation.
  15. 15. Use Compare Fundingto get an Invoice Financequote