Invoice Finance

Invoice factoring is generally a funding facility where the lender manages your accounts receivable and collections. This is beneficial for businesses that don’t have a dedicated accounts department. It enables you to spend more time growing your business with sufficient cash flow rather than chasing payments and accounts management.

With Invoice Finance or Invoice Discounting, you send your invoice details to the lender, but your business retains control over collecting the outstanding invoices. The funding facility is usually strictly confidential. Due to the collections service, factoring fees are generally higher than the fees paid for Invoice Discounting.

There are two main types of invoice factoring: recourse and non-recourse factoring.

In a recourse factoring arrangement, the risk of non-payment of the invoice remains with your business. If your customer is unable to pay, you will need to cover the cost of the financing you received from the factoring company.

With non-recourse factoring, you essentially sell the invoice. Once you have received funding, the factoring company is responsible for collecting the debt. Because of the increased risk, factoring companies generally charge higher fees for non-recourse factoring.

With ScotPac, you can mitigate the risk of non-payment with Bad Debt Protection. This additional service protects your business cash flow in the event of customer non-payment.

While traditional business loans and overdrafts typically require real estate collateral, Invoice Finance uses your accounts receivables as security. You can get paid faster for the goods and services you have already sold.

You get an immediate cash advance on your unpaid invoices, with the finance company charging a small percentage as a fee for the facility.

Unlike a traditional business loan, you can be approved for a Debt Factoring or Discounting facility and access a cash advance in as little as 24 hours. There are no fixed monthly repayment terms, and you can choose how many invoices you want to submit for financing.

Invoice Financing is more flexible than an unsecured business loan. With an unsecured loan, you receive a lump sum from the lender. Over the term, you repay the loan principal plus interest through regular repayments.

An Invoice Finance facility provides access to funding as and when you need it. You can fund an invoice when you need a cash flow boost, and the repayment happens automatically when your customer pays the invoice.

Invoice Financing is also more accessible. Most loan providers require a business to have a long trading history and a strong credit rating. An Invoice Finance company is more interested in the ability of your customer to pay the invoice. Your receivables provide the security you need to access funding.

Yes. A Debtor Finance facility can be an excellent option for a growing start-up or small business. It can help to improve cash flow management and fuel sustainable long-term growth.

Due to strict lending criteria, traditional loans and overdrafts are usually out of reach for start-up companies. We are interested in where you are headed, not how many years you have been in business. Call the number below and speak to one of our financial advisors to see which finance product is the best option for your growing business.

It depends on the type of Invoice Finance facility you choose. With Invoice Factoring, we’ll handle your accounts receivable and collections administration as a third party. So your customers will be aware of your partnership with ScotPac.

If you would like a confidential arrangement, ask one of our friendly business finance specialists about Invoice Discounting. You can manage your accounts receivable and collections with the funding arrangement remaining confidential.

Once your funding facility is in place, we will provide your customer with new bank account details. Depending on your facility type, this ‘Notice of Transfer’ can appear on our letterhead or yours.

We work hard to ensure that doesn’t happen. We’ll conduct credit checks to help you avoid overextending with a customer that may struggle to pay. If you are worried about how an invoice non-payment could impact your finances, you can include Bad Debt Protection as part of your credit facility to protect your working capital.

Yes, you will be able to access an easy-to-use online portal. You can upload outstanding invoices, view your funding limits, and download reports.