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• 05 Jul

  Criteria To Qualify For Invoice Finance

  Looking for invoice finance? For a complete overview of how invoice finance works, the different facility types, provider comparison and quotation searches, see our main Invoice Finance page.

  The basic criteria to qualify for invoice finance are often much simpler than many businesses expect. Many businesses that believe they will not qualify for invoice finance are surprised to discover that suitable funding options are available. In its most basic form, invoice finance is generally available to businesses that supply goods or services to other businesses and issue invoices with payment terms.

  For a more detailed explanation of the checks carried out by providers, see our article: What Criteria Do Lenders Consider When Approving Invoice Finance?

  What Are The Basic Requirements?

  Most invoice finance providers will look for businesses that:

  • Sell to other businesses rather than consumers.
  • Issue invoices on credit terms.
  • Can demonstrate that goods or services have been supplied.
  • Have customers who are likely to pay their invoices.
  • Maintain suitable accounting and business records.

  In many cases, startups, growing businesses and companies with previous financial difficulties may still qualify, depending on the circumstances and the provider selected.

  Do All Invoice Finance Providers Have The Same Criteria?

  No. Different providers have different lending criteria and areas of specialism. Some focus on smaller businesses, while others specialise in larger companies. Certain providers have expertise in sectors such as recruitment, construction, manufacturing or transport.

  As a result, a business that does not meet one provider's criteria may still be acceptable to another.

  What Factors Can Affect Eligibility?

  Although the basic criteria are straightforward, providers may also consider factors such as customer concentration, invoice values, contractual terms, payment performance, disputes, credit notes and the overall quality of the sales ledger.

  Businesses with unusual trading arrangements, stage payments, applications for payment or overseas customers may still qualify, although specialist providers may be required.

  Can New Businesses Qualify For Invoice Finance?

  Yes. Some invoice finance providers are willing to support new businesses, provided there are suitable customers, genuine invoices and a realistic trading proposition. Startups are often surprised to discover that the age of the business is not always the deciding factor.

  If you are unsure whether your business qualifies, FundInvoice can help identify suitable providers and compare available options.

  For information about pricing and charges, see our Invoice Finance Costs page.

  By Glenn Blackman