Invoice Finance

What is it?

Invoice finance is a way of financing your business by giving you a % of your outstanding invoices as soon as the goods/service has been delivered as opposed to waiting for your customers to pay. This allows you to then pay your bills (wages, suppler payments etc) before your customer pays you which is often necessary in a growing business.

DETAILS

There are 4 main variations of invoice finance:

Factoring

The lender will not only lend the money but will also carry out credit control and maintain a sales ledger. Debtors are aware of the lender due to the credit control and also a notice of assignment on the invoice.

Confidential Invoice Discounting

For more sophisticated businesses where a sales ledger and credit control is already being done competently. This is the lowest touch where administration is completed by the client still.

CHOCS

CHOCS (Customer Handles Own Collections) is a hybrid of the above two. This is a disclosed facility but the client is allowed to carry out the credit control.

Construction

Can be any of the above three but is into construction companies where staged invoices, applications for payment and contracts are prevalent. The lender can fund applications but with the additional risk, additional due diligence is undertaken.

The benefits

  • Funding that grows with your business – releasing more cash as you need it
  • Uses security in your business meaning limited personal security (if any)
  • Use finance for any purpose
  • Can have credit insurance bolted on
  • Tailored products for specific circumstances (confidential vs credit control function)
The efficiency with which Magna Money helped us raise working capital was second to none. They made dealing with all the paperwork easy and kept us informed along the way, even outside business hours by mobile and text. We are pleased to have forged this working relationship, and we would definitely use Magna Money again!
DanielSenior Partner

reviews

Who we work with

A Selection of our  strategic finance partners

costs

What does it Cost?

Costs vary from agreement to agreement. The two main costs are service charge which is charged as a percentage of the invoice that is financed (so essentially turnover) and discount which is another name for interest. Interest is charged like it is on say an overdraft, with a rate for each day you borrow.

Find out how we can help?

Providing bespoke, collaborative and expert funding advisory to business owners throughout the United Kingdom

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