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• 10 Jul

  Can You Have Invoice Finance And An Overdraft

  Yes, you can have invoice finance and an overdraft from a bank. In fact, our recent research amongst a sample of invoice finance users found that 30% of them used some combination of invoice finance and overdraft or loan finance. So it is very common. We often come across situations where a small residual overdraft remains after the client starts using an invoice finance facility such as factoring or invoice discounting.

  In some cases, where a client is currently funded by overdraft and may wish to move to invoice finance, the bank will provide a waiver over any charge or debenture that they hold to release the book debts from falling within the bank's security. This will allow the invoice finance facility to provide more funding than the bank overdraft in many cases.

  It is also common for some funds from the invoice finance initial payout to be used to partially, or fully, repay an existing bank overdraft. This is because invoice finance can often release more funding than would be available through a traditional bank overdraft.

  By Glenn Blackman