18 August 2014

Invoice Finance & Asset Finance

invoice finance & asset finance

Invoice Finance & Asset Finance

Two terms that are used a lot but carry many different meanings depending on who you are talking to. Let’s try and put a bit of clarity around things.

Invoice Finance

Where you raise an invoice and there is a lag between when it is raised and when it is paid. Funding is raised, secured by the strength of the invoice.

You can undertake Invoice Finance in many different ways. Some of the more common variations are below. Before you jump into any one of these make sure you talk to us first to ensure it is the best option for you.

  • Factoring, where the whole invoice process is managed by the lender. Funds are raised against your invoice, typically up to 90% of the value of the invoice. The collection process is managed by the lender, they chase for payment and payment is made direct to the lender
  • Confidential Invoice Discounting / Financing, this is where the invoice is financed but the debtor knows nothing about it. No contact with the debtor is made by the lender. It is at is says, ‘confidential’
  • Single Invoice Finance, probably the most common area of invoice finance these days. A single invoice is used to raise funding, generally cashflow is OK but you need funds due to one invoice. Single Invoice Finance is like ‘pay as you go’, you use it as you need with no contract or ongoing commitment. This area is constantly evolving and improving, there is a whole page dedicated to single invoice finance.

The best thing about Invoice Finance (in whatever form it takes) is that it solves cashflow issues at the cause. The repayment comes from strength of the debtor and there is much less focus on your business trading history. It can work really well for growing businesses or those that are winning new & larger contracts.

The Advantages To Using Lime Consultancy For Invoice Finance

We are 100% independent and work with a wide range of invoice finance lenders, this means we can tailor the funding to suit your business. This means we will;

  • Work with a lender who understands your business sector
  • Understand how you invoice, whether that be on a project, staged or gradual sign-off basis
  • Work around previous credit issues or any periods of losses
  • Work around concentrated debtor books where one debtor forms the majority of the overall ledger
  • Understand how quickly you need to access cash, working with lenders who can fund invoices the same day

For more details of what we can offer please get in touch. You can also download our one page Invoice Finance flyer below.

Invoice Finance

Asset Finance

Where an ‘asset’ is purchased or refinanced. The asset itself is used as security for the borrowing. There are several incarnations of Asset Finance and getting the right one can depend on the asset itself and your tax position. It is always a good idea to run any potential Asset Finance transaction past your accountant before you do anything.

The main difference between Asset Finance lenders are;

  • The length of term offered
  • The type of assets they will finance, some lenders prefer different assets from other
  • The cost of the loan
  • The type of Asset Finance loan they offer

You may well hear terms such as ‘Asset Lease’, ‘Hire Purchase’, ‘HP’, ‘Operating Lease’, ‘Finance Lease’ or something altogether different. If you do and want to know what the difference is between each then give us a call on 01293 541333 or contact via the website and we will talk you through it.

Why Use Lime Consultancy For Asset Finance

We work with asset finance lenders across the UK, finding the best solution for your business and the asset you want to raise finance against. We can;

  • Raise finance against existing assets, this includes property
  • All size and types of assets can be financed
  • Variable terms
  • Credit and loss history does not have to prevent lending
  • Approval can be provided on same day

If we cannot find the solution that works for you we will refer you to another specialist broker, this means we should always be able to find a solution that works for you.

What Next?

If you are thinking of solving your cashflow using Invoice Finance or considering any form of Asset Finance then please give Lime Consultancy a call first. We can often secure better terms and will ensure you understand exactly what you are committing yourself to.

Remember that all credit is subject to status and the relevant terms of the individual lender, make sure you know what you are entering in to before you commit to any finance agreement.