We compare all invoice factoring options to make sure you get the right product for your business

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

Get a quote online 0808 250 0859

What is Invoice Factoring?

Invoice factoring is a financial solution that allows businesses to sell their invoices to a third-party factoring company for immediate cash. This helps improve cash flow without incurring additional debt.

Key Benefits of Invoice Factoring

  • Immediate Cash Flow: Access funds typically within 24 hours.
  • Outsourced Credit Control: The factoring company handles credit control and collections.
  • Risk Mitigation: Options for non-recourse factoring protect against bad debts.

How Does Invoice Factoring Work?

  1. Issue Invoices: Provide goods or services and issue invoices to your customers.
  2. Sell Invoices: Submit these invoices to a factoring company.
  3. Receive Advance: The company advances a percentage (usually 80-90%) of the invoice value.
  4. Collection of Payments: The factoring company collects the payments from your customers.
  5. Final Payment: Once the customer pays, the factoring company releases the remaining balance, minus fees.

Is Invoice Factoring for Small Businesses?

Invoice factoring is especially beneficial for small and growing businesses, providing the necessary resources to thrive and expand without incurring additional debt. It is an attractive solution for various industries, ensuring small businesses maintain financial stability and support continuous growth.

Invoice Factoring vs Invoice Discounting

Feature

Invoice Factoring

Invoice Discounting

Control

Managed by Factor

Managed by Business

Confidentiality

Low

High

Cost

Higher due to credit control services

Lower

Risk Management

Factor assesses customer risk

Business retains risk

Types of Invoice Factoring

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Spot Factoring

Spot factoring is a way for a business to access funds by selling unpaid invoices to a 3rd party, a spot factoring company, on a one off basis in order to receive payment quicker.

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Reverse Factoring

Reverse-factoring is a financing option where a 3rd party financial provider finances the supplier on behalf of the buyerThe process involves the supplier, the buyer and the finance provider .The supplier sells the buyer’s unpaid invoice to the finance provider and receives the cash quickly, the buyer also gets longer to pay for its goods.

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Account Receivable Factoring

Account receivable factoring provides businesses with an option to finance their venture without taking out a loan. This is a type of debtor finance where SMEs sell its invoices to a third party at a discount, in order to provide an immediate cash injection. There are many reasons why a business may factor an invoice, including increasing cash flow and mitigating credit risk.

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Recourse and Non-Recourse Factoring

Resource factoring is a form of finance where a company sells its invoices to a factoring company. The factor pays the company a percentage of their cash value and then chases up payment of the invoices on behalf of the company. Non-Recourse factoring is a form of finance where a company sells its invoices to a factor and receives a percentage of the cash value from them.

How Can Invoice Factoring Help You?

Expand your operations

Invest in stock, machinery or equipment

Employ new members of staff

Fix long-standing issues with cash flow

Invoice Factoring FAQs

Is Invoice Factoring a Good Idea?

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

Is Invoice Factoring Regulated in the UK?

Yes, invoice factoring is regulated in the UK to ensure fair practices and protect businesses.

What Is a Typical Factoring Fee?

A typical factoring fee ranges from 1% to 5% of the invoice value, depending on various factors such as the creditworthiness of your customers and the volume of invoices.

How Do You Qualify for Invoice Factoring?

To qualify for invoice factoring, your business needs creditworthy customers, a consistent record of invoice payments, and invoices that are free from liens or other claims.

How Long Does It Take to Factor an Invoice?

Factoring an invoice usually takes between 24 to 48 hours after the initial setup and approval process.

What Are the Disadvantages of Invoice Factoring?

Disadvantages include factoring fees, potential impacts on customer relationships, the need to disclose financial information, and dependence on the creditworthiness of your customers.

Why Choose Novuna As Your Factoring 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 support

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.

Our Factoring Service is Award Winning

We're 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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Get a quote now

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.

Get in touch

Contact one of our invoice factoring experts on our freephone

0808 258 2297

8:45 - 17:15 - Monday to Thursday &
8:45 - 16:45 - Friday

Specialist recruitment firm sees 60% growth in turnover

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Want to learn more about how you can boost your businesses cash flow?

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We explore ways you can begin improving your cash flow situation and start getting your business on track to positive cash flow.

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We compare all invoice financing options to get you the right product and the best deal.

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