Invoice and debtor finance
The money is already yours. It is just sitting in someone else's account.
Borrowing against invoices you have issued and not yet been paid for. It suits businesses selling on thirty to ninety day terms that spend the cash long before it arrives, and it is the one facility that grows with the business instead of needing a new application every time it does.
Where this usually comes up
- Growing, and finding that growth consumes cash faster than it produces it
- Paying labour and materials months before the customer pays the invoice
- Turning down work because the cash to fund it is tied up in the last job
- Carrying an overdraft that is fully drawn every day of the year
How it is assessed
What a credit team is actually deciding.
Any lender will describe the product. This is the part that decides whether your version of it gets written, and on what terms.
The financier assesses your customers as much as you
Their payments are the repayment source, so the book is the credit case. Who your customers are, how reliably they pay and how the book is spread across them decides the advance rate and the price. A business can be excellent and still be a difficult invoice finance case because of who it sells to.
Concentration is the first thing they look at
One customer at half your revenue, paying at ninety days, makes their payment behaviour your facility's payment behaviour. That is not a reason to avoid the facility, but it is the thing to know before you apply rather than after, because it decides which financiers are open to you and on what terms.
It is tested against the cash cycle it exists to fund
In a servicing model the question is whether the facility genuinely bridges the gap between invoicing and collection, and what it costs the margin to do so. A facility that closes the gap and leaves the margin intact is a good facility. One that closes the gap by taking the margin has solved a cash problem by creating a profit problem.
The headline rate is not the cost.
Invoice facilities carry service fees, discount charges, line fees and sometimes audit fees, and the cost that matters is the total against the period the money is actually drawn. Compared to a term loan rate it looks expensive, and that is usually the wrong comparison. The right one is against what the cash releases: the work you can take, the discounts you can claim, the overdraft you can retire.
What we do with it
The file gets built before it gets lodged.
We read the debtor book the way a financier will, before you apply: concentration, ageing, dilution and who is actually paying to terms. Then we price the facility on total cost across the drawn period rather than the headline rate, set it against what the released cash is worth to the business, and take it to the financiers whose appetite matches your book. If the honest answer is that the cost outweighs what it frees, that is the answer you get.
Work it out yourself
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General information only. Indicative, not a credit assessment, and not an offer of finance. Lending decisions rest with the lender and depend on your circumstances and their criteria.
Common questions
Compared to a headline term loan rate, yes, and that comparison is usually the wrong one. The real question is what the facility costs against what it releases: whether the cash it frees lets you take work you are currently turning down, take supplier discounts you are currently missing, or stop paying for an overdraft that never swings back. Work it out on the true cost of finance calculator, where the fees and the drawn period both go in.
It depends on the facility. Disclosed arrangements involve your customer being notified and sometimes paying the financier directly. Confidential arrangements do not, and you keep collecting. Confidential facilities are harder to qualify for and cost more, and which one you can access depends on the size and quality of your book. It is worth deciding early, because it shapes which financiers are open to you.
Spread, quality and behaviour. A book of many creditworthy customers who pay close to terms supports a high advance rate at sensible cost. One customer who is half your revenue and pays at ninety days does not, however good your business is, because their payment behaviour becomes your facility's repayment behaviour. Concentration is the first thing a financier looks at and it should be the first thing you look at too.
Not on its own. Plenty of profitable, growing businesses use invoice finance precisely because growth consumes cash: you pay for labour and materials months before the customer pays you. What does read badly to a credit team is an invoice facility that is fully drawn every day of the year alongside a stretched overdraft, because that pattern says the funding is covering something structural rather than a timing gap.
Two ways this can work.
Referred to us for finance? You are in the right place either way. Either we arrange it, or we prepare the file for whoever does.
Have us arrange the finance
We build the analysis, write the submission and take it to the lenders who will actually do the deal, across 40+ of them. One team from the first set of figures to settlement, and one team holding the covenants after it.
Start a finance enquiryAlready have a broker or a banker you trust?
Keep them. We will build the file to the standard a credit team expects and work directly with whoever lodges it. Same models, same documents, same standards, and we do not take the lodgement on that engagement.
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