Invoice Financing

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Invoice financing allows you to borrow cash instantly for outstanding invoices.

If your business regularly uses invoices to get paid, then you should be eligible for invoice finance. It could be a great option for you to ensure your business continues to have cash flow for your day to day running.

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Types of Invoice Financing

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.

Invoice Factoring

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.

Invoice Discounting

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.

Why Invoice Finance?

Invoice finance is great for getting cash into your business fast when the money you are owed takes time to reach you. This is particularly relevant to invoice discounting as the cash can be made available as soon as an invoice is issued. Getting your cash without delay can make a huge difference to the operation and growth of your business.

Invoice finance is an unsecured business loan meaning your physical assets can’t be touched.

Is invoice finance right for me?

There are some restrictions with invoice finance that you should be aware of before applying.

Your adviser will discuss these with you before you apply to ensure that invoice finance is the right option for you.

Invoice finance is only available on a B2B basis as the invoices must be commercial invoices to qualify.

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    A mezzanine loan: A case study

    Our client wanted to purchase an existing building which they planned to convert and extend into apartments.

    • Purchase price: £975,000
    • Build facility: £1,075,000
    • GDV: £2,950,000

    We sourced senior debt at 60% LTGDV at 7% pa. 2% in and a 1% exit fee on loan amount. This equated to £510,000 on the day one advance and £1.075m build facility

    Client equity contribution is c£465k on the purchase. As the client was waiting for a sale to go through on one of his other projects, his equity was tied up.

    The Solution

    He needed more leverage towards the purchase of £975k due to his equity being tied up. Our adviser was able to liaise with one of our junior funding partners and they agreed to lend an extra £200k on the day one advance, taking the total day one advance to £710k on £975k which means the clients’ equity contribution is now only £265k

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    Case Studies

    I’m moving into my dream home thanks to Mesa – I’d recommend them to anyone and I feel very lucky to have been taken care of by a company that gave me such brilliant support

    Alexandra Winter

    We have been so impressed with Mesa Financial. They have a highly knowledgeable and skilled team. The customer service has been amazing throughout the process and they are always available to you via phone or email. Highly recommend them – very professional service.

    Nina Jay

    Mesa has supported me through the whole process of getting a mortgage. My contact reference was always reliable and always promptly took action to make sure everything would move ahead smoothly. Brilliant service.

    Robin Ancilotto