Invoice financing is a funding option for a continuing business or start-up without necessarily approaching a bank.
Also known as accounts receivable financing, the premise of invoice financing is based on borrowing against unpaid invoices, that is, your company’s accounts receivable. Essentially, your loan is financed on the invoices you provide to your clients and customers.
Why use invoice financing?Invoice financing allows businesses to improve cash flow, pay employees and suppliers as well as invest in further growth. The borrowing method is attractive for lenders as the invoices are essentially a form of security. Lenders can also limit their risk by only providing 70-80 per cent of the value of the invoices.
Invoice factoringThis is the more popular form of invoice financing where you sell your accounts receivable in return for cash.
Asset based loanThis type of invoice financing is considered an intermediate product between factoring and a bank line of credit that enables capitalisation of assets. As the name suggests, an asset based loan is a process where the company's assets are used as collateral to acquire a loan. One type of the asset that can be used for such loans is your company’s invoices. You can also use your equipment, machinery and real estate.
A restaurant has operated on this very prominent, high street corner location for many years and was purchased late in 2016 by the vendor with the intention of adding a retail business to it commercial business. The vendor then invested circa £70,000...
Serves clients in the automotive, industrial, medical and geotextile sectors. Operates from 16,000 sq ft leasehold premises. Sustains and generates consistent revenue without the need for marketing expenditure. Retirement sale. Offers invited.
Provides a comprehensive delivery service, with a directly employed fleet of delivery drivers. Highly experienced management team in place, capable of managing day-to-day operations, post-sale. Significant scope for growth with geographic expansion a...
Sign up to receive our acquisition alert emails to get your FREE guide
Business Sale Report is your complete solution to finding great acquisition opportunities.
Join today to receive:
All this and much more, including the latest M&A news and exclusive resources