What is Invoice Finance & How it works

Posted: 7th January 2016

For small to medium sized businesses getting paid is important and with credit terms ranging from 30-90 days, cash flow can become strained.

Invoice Financing is a way for businesses to release cash tied up in unpaid invoices. This cash can then be used to pay suppliers, employees and perhaps reinvest in the operations and growth of the business much sooner than waiting until customers have paid their invoices. 

The solution offered by Invoice Finance means that cashflow is improved and important working capital is released.

There are 2 types of Invoice Finance: Factoring and Confidential Invoice Discounting.

Invoice Factoring

We fund your invoices and provide you with a credit control function, where we professionally collect money from your customers on your behalf against outstanding invoices. For more on Invoice Factoring click here.

Confidential Invoice Discounting

The main difference between Invoice Discounting and Invoice Factoring is that with Confidential Invoice Discounting, your customers are unaware of our involvement.

Customers will pay into a trust account in your name, which we set up for you at the start of your facility. For more on Confidential Invoice Discounting click here

This type of Invoice Finance is ideally suited to those businesses who wish to retain their own credit control function.

The Benefits

  • Choose to keep your credit control function in house or outsource it to experts
  • Your customers do not need to be aware of our involvement
  • Release up to 90% of the invoice total within 24 hours
  • Your funding grows as your business grows
  • Helps you to accelerate your cash flow

Whether your business goals are to expand, acquire a new business; reduce finance costs or relieve cash flow pressures, Invoice Finance from Macla can help.

We offer flexible solutions which meet your needs and each facility we create is bespoke to you and your business, so whether Factoring or Invoice Discounting is the right choice for you, we will help you every step of the way.

If you are already using invoice finance and looking to change your invoice finance provider or would like a competitive quote to see if you are getting the best deal please get in touch by email here or call 020 3555 4545 and we will be happy to help.