Invoice Finance

Understanding the different types of invoice finance and which product is right for your business

Novuna compares all invoice financing products to make sure you get the best deal and the right product for your business.

Unsure which invoice finance product is the right one for your business? We compare the best invoice financing options available. Get a quote online or call us on 0808 250 0859 to speak to one of our cashflow finance experts.

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Please note that costs are an estimate only and are based on the entered values. Your final quote may change once a Business Development Manager has assessed your business in more detail.

What is Invoice Finance?

Invoice finance, also known as accounts receivable financing, enables businesses to borrow money against their outstanding invoices. This type of financing helps companies improve cash flow, pay employees and suppliers, and reinvest in operations and growth without waiting for customer payments.

By using invoices as collateral, businesses can receive immediate funds—typically up to 90% of the invoice value. This method of financing is particularly beneficial for B2B companies facing cash flow issues due to delayed customer payments.

While it offers flexibility and quick access to working capital, businesses must consider the associated fees and ensure they can manage repayments efficiently.

How Does Invoice Finance Work?

  1. Issue Invoices: Send invoices to your customers as usual.
  2. Submit to Finance Provider: Submit the invoices to your finance provider.
  3. Receive Advance: The provider advances up to 90% of the invoice value, typically within 24 hours.
  4. Customer Payment: Customers pay their invoices directly into a bank account managed by you or the finance provider.
  5. Balance Payment: Once the customer payment is received, the finance provider releases the remaining balance, minus their fees.

What are the Types of Invoice Finance?

There are 3 main types of invoice financing:

  1. Invoice Factoring: Sell your invoices to a factoring company and receive an advance. The factoring company handles collections.
  2. Invoice Discounting: Retain control over collections and receive an advance on your invoices from a finance provider.
  3. Selective Invoice Finance: Choose specific invoices to finance, providing flexibility and control.

Invoice Financing FAQs

What is Invoice Financing?

Invoice financing is when businesses sell their outstanding invoices to a lender or factoring company to receive immediate cash. This helps improve cash flow and manage short-term financial needs.

Who's Involved in Invoice Finance?

Invoice finance involves the business seeking funding, the finance provider, and the customers who owe the invoices.

Is Invoice Financing a Good Idea?

Invoice financing can be a good idea for businesses needing immediate cash flow without taking on additional debt.

Is Invoice Financing Risky?

Invoice financing carries some risk, such as the potential for customer non-payment, but the risk is often lower than traditional loans.

Who Can Use Invoice Financing?

Any business that issues invoices to customers can use invoice financing, especially those with long payment terms or seasonal cash flow needs.

Is Invoice Financing for Small Businesses?

Invoice finance is particularly beneficial for small and medium-sized enterprises (SMEs) that may face cash flow challenges. It provides a reliable source of working capital without the need for traditional bank loans.

What Are the Benefits of Invoice Financing?

Faster Access to Cash

Receive funds almost immediately compared to traditional loans.

Less Stringent Requirements

Approval is often based on the creditworthiness of your customers.

Scalability

As your sales grow, the amount of finance available increases proportionally.

Maintain Equity

Unlike equity financing, invoice finance doesn't require giving up a portion of your business. You retain full ownership and control.

Improves Negotiation Power

With better cash flow, businesses can negotiate better terms with suppliers, potentially securing discounts for early payments.

Access to Expertise

With Novuna as your invoice finance company, you'll get access to our wealth of knowledge and expertise for any cash flow management queries as well as support finding the right invoice finance product for your business.

Expand your operations

Invest in stock, machinery or equipment

Employ new members of staff

Fix long-standing issues with cash flow

Is Invoice Finance Suitable For Your Business?

Consider your cash flow needs, the cost of financing, and your comfort with the involvement of a third party in your receivables management. If you need quick access to cash and have reliable customers, invoice financing can be a valuable tool.

  • Are you a UK based Small-to-Medium sized business?

  • Is your business invoicing other businesses?

  • You can be starting up, growing or well established. We support many businesses at different stages with their growth ambitions.

  • Do you have a minimum turnover of £50,000 per year?

  • If your business is a new start we prefer homeowners, but if not please still get in touch as we will look at each business individually.

  • If you export, please get in touch as we already support many exporting businesses.

Why Choose Novuna As Your Invoice Finance Company?

6 month trial period

A 6 month trial period so you can be sure the product is right for you, followed by a 6 month rolling contract – we don’t tie our clients in for long periods.

Digital onboarding

We are the first in the market to offer a digital onboarding process and have been leading the way with our digital capabilities allowing clients to sign up within 24 hours from the first appointment.

Client trust account

Once you become a client you will be given your own trust account, meaning you will get same day availability on your funds. You can also view all of your invoices and payments online at a time suitable to you, 24/7.

No uncleared effects

We have heavily invested in our digital capabilities. This includes the auto allocation of payments using Artificial Intelligence. Ultimately this advance in technology means that our clients access money quicker as well as saving money on interest charges due to auto allocation.

Simple pricing

We aim to make the process of Cash Flow finance as simple and straightforward as possible. Our pricing is very straightforward to understand. For a no obligation quote or an informal chat you can call our friendly team today on 0808 250 0859.

Award winning service

We offer award-winning client services and individual Relationship Managers who are on the other end of the phone or out in the field to visit you in person.

Award Winning Invoice Finance Facility

Highly Recommended by Our Customers

"The communication and support has been outstanding. Providing me with all the information I needed regarding new clients coming onto our books. The system they use is so user friendly and the drawdown payments are very efficient in the fast moving world of temporary payroll.'

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Invoice Finance Articles

We compare a range of invoice financing options to get you the right product and the best deal.

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