Invoice Financing Invoice finance that pays you now, not when your customers get around to it.
Late-paying customers are one of the biggest causes of cash flow problems. Invoice financing lets you borrow against the money your customers owe you, so you are paid now rather than in 30, 60 or 90 days.
Secured by your invoices · 50+ lenders · Based in Bella Vista, NSW
Why choose Greenline for your invoice financing?
Businesses of all sizes struggle when customers pay late. Greenline Home Loans can assist your business with its invoice financing needs, finding a suitable product from our panel of 50+ lenders.
Invoice financing eases the pressure by letting a business borrow from a lender against the amount due from its customers. Here at Greenline Home Loans, our finance brokers are ready to help you improve your cash flow and take advantage of growth opportunities.
How invoice financing helps
Invoice financing turns the money owed to you into a loan asset, so your business is paid for outstanding invoices right away. These are the ways it relieves cash flow stress.
Flexibility
You can give your customers leeway to pay their bills on their terms, without your business running short in the meantime.
Security
Your invoices are the collateral, so invoice financing does not usually require property as security, although some funders ask for a director's guarantee.
Predictability
Late payments damage your cash flow and your plans. Invoice financing gives your business a more predictable cash flow.
Accessibility
Because the facility is tied to the value and quality of your invoices, a business with an imperfect credit history is more likely to be approved.
How invoice financing works
You issue an invoice to a business customer on your usual terms, say 30, 60 or 90 days. Instead of waiting, you assign the invoice to the financier, who advances most of its value to you straight away. When your customer pays, the financier releases the balance to you, less its fees. The invoices are the security, so the facility grows with your sales rather than with the property you own, and a business with an imperfect credit history can still qualify because the lender looks at the quality of your customers and invoices.
Invoice factoring or invoice discounting
With invoice factoring, the financier takes over collecting the invoices and your customers pay the financier directly, which also saves you the chasing. With invoice discounting, you keep collecting from your customers as normal and repay the financier when they pay; the facility is confidential, so customers need not know you use it. Factoring suits smaller businesses without a credit control team; discounting suits established businesses with their own collections. Your broker matches the structure to how you run the business.
Who invoice financing suits
Businesses that sell to other businesses on credit terms and wait weeks to be paid: wholesalers, labour hire, transport, manufacturing, professional services and contractors. It is less useful for businesses paid at the point of sale, which may suit a merchant cash advance or a business line of credit instead. Fast-growing businesses use it because the available funding rises with turnover.
What invoice financing costs
Financiers typically charge a fee as a percentage of each invoice's value, and interest on the advance for the days it is outstanding, so the cost depends on how long your customers take to pay and how much of your ledger you finance. Compare the total cost against the discount you might give customers for early payment, or the cost of an overdraft, before you commit; we set out each lender's fees side by side. See how the finance process works.
Invoice financing FAQs
What is invoice financing?
A facility that advances your business most of the value of its unpaid invoices, so you are paid soon after invoicing rather than when your customers pay. The invoices are the security, and the balance less fees is released when the customer settles.
How does invoice financing work?
You invoice your customer on normal terms, assign the invoice to the financier, and receive an advance against it. When the customer pays, the financier releases the remainder less its fees. With factoring the financier collects from your customers; with discounting you collect and the arrangement is confidential.
What is the difference between invoice factoring and invoice discounting?
Factoring: the financier buys and collects the invoices, and your customers pay the financier. Discounting: you keep collecting from your customers and repay the financier, and customers need not know. Factoring includes collections; discounting is confidential and suits businesses with their own credit control.
How much does invoice financing cost?
Usually a fee as a percentage of the invoice value plus interest on the advance for the days it is outstanding, so the cost rises the longer your customers take to pay. The percentages depend on the financier, your industry and your customers; your broker compares them before you commit.
Is invoice financing right for my business?
It suits businesses that sell to other businesses on credit terms and have cash tied up in unpaid invoices. It is less restrictive than a traditional loan, grows with your sales and can improve cash flow, but it costs more than a secured loan for a business that can wait to be paid.
Can I get invoice financing with a poor credit history?
Often, yes. Because the facility is secured by your invoices, the financier looks mainly at the quality and creditworthiness of your customers, so a business with an imperfect credit history is more likely to be approved than for an unsecured loan.
How quickly can I get invoice financing?
Setting up the facility takes longer than a single loan, because the financier reviews your ledger and customers, but once it is in place advances against new invoices are typically paid within a day or two of the invoice being approved.
What happens if my customer does not pay the invoice?
It depends on the facility. With a recourse facility, the usual kind, the risk stays with you: if a customer does not pay, you repay the advance or replace the invoice with another, and the funder may charge for the overdue period. Some facilities include credit protection against a customer's insolvency at extra cost. Check which you are being offered before you sign.
Who is eligible for invoice finance?
Businesses that invoice other businesses on credit terms, usually with a trading history and a spread of creditworthy customers; funders set their own minimum turnover and look at the quality of your ledger rather than property security. Some ask for a director's guarantee. A broker matches your ledger to the funders that fit.
Do you need invoice financing?
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