The benefits of Selective Invoice Finance and how it can help your business grow

Finding the right finance to suit the needs of your business isn’t as difficult as you may imagine. These days there are a plethora of alternative finance providers who are using more innovative and non traditional ways to help you get cash into your business, especially if you only need to borrow the money for a short term period of time.

Selective Invoice Finance is a relative newcomer to the business to business finance arena. A ‘spin off’ of the traditional invoice finance facility, selective invoice finance allows you to fund just one or two invoices, without assigning the whole of your ledger as a full invoice finance facility would.

Invoice finance is a product which has been available to business in the UK for over 30 years, but still only 44,000 businesses currently use it (ABFA statistics Q2 2016). Quite simply the facility allows you the business owner to release up to 85% of the value of the unpaid invoice. Once your debtor has paid their invoice, the invoice finance provider, will release the remaining value minus any fees. Contracts for invoice finance facilities normally last for between 12 months, with six months notice and 2 years and there are fees and charges to be aware of.

Selective Invoice Finance on the other had allows you to choose just one invoice or more (depending upon your requirements) to release the cash into your business. It’s a short term funding solution ideal to bridge a cash need quickly.

The key benefits and considerations of selective invoice finance include:

  • No long term contracts
  • The facility can be used repeatedly
  • Confidential facilities are available
  • No additional fees or charges
  • You pay a fixed daily rate for the funds you borrow
  • Some lenders will only charge you for the number of days you borrow the cash, not the time you think the cash may be needed for. As an example you think you may need to borrow the cash for 60 days (as this is how long your debtor usually takes to pay you) but your debtor pays you within 30 days. You only pay for the 30 days the money as outstanding
  • Other lenders may charge set up fees or renewal fees so it would be wise to check with your provider before signing the documentation, it could result in you saving money in the longer term

As one of the UK’s leading self funded short term finance providers Catalyst Finance can help you meet your short term business finance needs. We fund businesses needing £100,000 to £1 million nationally. Our team of finance experts will take the time to visit you and your business and tailor a short term finance solution which will help you bridge your funding needs to suit you and your company perfectly.

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