Line of Credit
Invoice Finance for Small Businesses
Invoice finance is your funding solution that gives your small business an advance of capital for your current unpaid invoices and ongoing funding against invoices raised for services completed or delivery of goods. At ABL, we refer to this type of funding as a Revolving Line of Credit (RLOC) without the restrictions of your industry standard invoice finance facility.
The principle behind the RLOC is that it alleviates the financial pressure of waiting for customers to pay your invoices. The RLOC serves to accelerate your cash flow by giving you money today for the items you will sell or the receivables you will collect tomorrow. They, therefore, work especially well for small or mid-size businesses that are experiencing rapid growth.
Also known as:
Receivables finance, accounts receivable finance, invoice factoring and invoice discounting.
How Invoice Finance Works
First
You invoice your customer after providing them the goods or services.
Second
The invoice financier (like us) gives you a cash advance that is calculated as a percentage of your unpaid invoice or invoices minus the invoice financier’s fees.
Third
Then when your customer pays the invoice, you receive the remaining percentage.
Please Note:
We charge a flat fee % calculated on the invoice value, however the fee structure varies between invoice financing companies. Our major point of difference is that the ABL RLOC management fee % includes all your Data Management, IT and RLOC funding costs including interest. Invoice finance has a lot going for it in the right situation, but you need to choose the right type of invoice finance that suits your business. So, with our guidance take the time to understand the types of invoice finance, what each offers and then isolate the best type for your business.
Advantages of Invoice Finance
With an RLOC you retain ownership and control over your assets and your business. Other than solving your cash flow problems, the arrangement does not change how you run your business, and the ABL facility remains invisible to your customers.
For a business, invoice financing provides fast access (with minimal paperwork) to a flexible working capital facility to help mitigate cash flow emergencies.
This means your business can:
