Understanding selective invoice finance

Understand how selective invoice finance works and whether it's the right finance solution for your business.

Do you need selective invoice finance to help improve your cash flow?

Get an online quote or call us on the freephone number below to have a chat with one of our invoice financing experts.

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What is selective invoice finance?

Selective invoice finance is a bespoke financial solution, enabling businesses to enhance their cash flow by choosing specific invoices to finance. In this arrangement, companies can select individual invoices and receive an advance of a substantial portion of their value from a finance provider.

This immediate injection of cash bolsters working capital, providing essential liquidity especially during periods when business is slower or cash flow is tight.

Unlike full ledger financing, selective invoice finance offers the flexibility to finance only the invoices required, allowing for more targeted financial management.

How does the selective invoice finance process work?

Step 1:

The selective invoice finance process involves a business choosing specific invoices to submit to a finance provider.

Step 2:

Once these invoices are verified, a percentage of their value is advanced to the business, usually within a short timeframe.

Step 3:

The remaining balance, minus any fees or charges, is released once the customer pays the invoice in full.

Selective invoice finance vs selective invoice discounting

Selective invoice finance

Selective invoice finance is typically a broader service, often including additional support such as credit control and collections assistance.

Selective invoice discounting

Selective invoice discounting is more discreet, as businesses continue to manage their own credit control, preserving direct relationships with their customers.

What are the advantages and disadvantages of selective invoice finance?

Selective invoice finance offers a tailored solution for businesses seeking flexibility in managing their cash flow. Understanding the nuances between this and selective invoice discounting is crucial for choosing the most suitable option.

While there are clear benefits, it's important to weigh these against the potential drawbacks to make an informed decision that aligns with your business strategy:

Advantages of selective invoice finance:

  • Flexibility: Businesses can choose which invoices to finance, providing control over the funding they receive.
  • Improved cash flow: Quick access to funds from selected invoices can improve the working capital position.
  • Credit control support: Some providers offer credit control services, easing the burden of chasing payments.

Disadvantages of selective invoice finance:

  • Cost: The service can be more expensive than traditional financing methods due to fees and interest.
  • Dependency: There's a risk of becoming reliant on invoice financing for cash flow management.
  • Customer interaction: In some arrangements, the finance provider may interact directly with customers, which could impact client relationships.

Why choose Novuna Business Cash Flow?

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.

We are an award winning invoice finance company

We come 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."

Read full review

Invoice finance in the UK have been revolutionised with our digital onboarding process

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Get in touch

Contact our friendly UK advisors on our freephone

0808 250 0859

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

More invoice financing products


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.


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.


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.


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.

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

Our Cash Flow Resource Hub has been set up to help SME's with cash flow finance advice, tips and resources to help with their cash flow position.

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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