There are two main types of invoice financing available. These are invoice factoring and invoice discounting. Both give the business the freedom to control their finances whilst money owed is further down the pipeline.
This option is easier for smaller companies to secure and is where the lender is closely involved. The lender will handle all aspects of your sales ledger such as debt collection and insuring against any bad debt. This invoice financing is right for you if you find yourself constantly chasing late payments. Rather than chasing invoices, you can focus your time on other aspects of your business.
This option is more suitable for established businesses with a higher turnover and greater resources. It is a more hands on option as you have more credit control with an invoice discounting facility than invoice factoring. The business receives an advance on the cash in exchange for a fee. However it is also the simplest form of invoice finance. Furthermore, it allows for client confidentially should that be required.