- 25 Feb
The Price Of Single Invoice Finance
Comparing prices for single invoice finance is not quite as straightforward as you might expect. I have just been looking at an example of some costings sourced for a prospective customer and there are numerous different pricing systems being used by the different invoice finance companies that we have spoken to.
It is always worth comparing selective quotes against other forms of invoice finance, see our guide for details.
The Price Of Single Invoice Finance
When comparing selective invoice finance prices, you firstly notice that there are a range of different pricing approaches in operation:
Single Fee or Flat Fee
The first method of charging is what could be described as a "single fee" or "flat fee" pricing structure. This method only includes a single charge but this can be made against either the value of the invoices, or the value of the funds in use (the amount that you are overdrawn with the funder) e.g. 2.5% of invoice value, if charged against value, or a percentage of the funds in use, for a given period.
Yet again, the method of charging is not consistent between providers, in a number of cases the period for the charge against funds in use is per 30 days, however in some cases it is per 15 days or it may be charged daily. The can even be combinations e.g. X% for the first 30 days and they Y% per day thereafter, others use a scale of increasing percentages for each block of days the funding is outstanding.
Processing Fee / Service Charge & Discount Fee / Interest
The second methodology is closer to the traditional method of charging for invoice finance facilities, involving two separate charges, one against the value of the invoices (often referred to as service charge or processing fee), and the other against the funds in use (often call the discount fee/charge or interest).
The percentages charged will vary between providers, and for different customers. Again there are several variations on how these work in detail. In some cases the discount fee will be per day, in others it will be for the first block of days and then subsequent blocks or individual days thereafter.
Comparing Single Invoice Finance Quotes
If you have quotes for single invoice finance already and you want to see how they compare to other providers, or if you want to see what various funders would charge your company, we are always happy to get the quote for you, and to explain how the pricing works. It is often worth comparing with whole turnover quotes as we have been able to save customers a lot of money by obtaining a quote for funding all their invoices, which can often work out significantly cheaper than using a selective facility regularly.
Article: How funders calculate charges.
- 18 Nov
Selective Invoice Funding Is Still Available
Previously I reported that the selective invoice finance (SIF) industry has mostly moved away from the invoice auction model, towards a model whereby pricing is determined according to a pricing policy for each funder.There still remain a number of SIF providers that offer flexible funding against individual invoices, or batches of invoices. Some sectors, such as car crash repairers, have their...
- 11 Jun
Selective Debtor Finance.
Selective debtor invoice finance (SDIF - also called single debtor finance SDF) is subtly different from selective invoice finance (SIF), and other types of receivables financing.With SDIF, you choose which debtors you want to receive funding against. You then submit all of your invoices, billed only to those chosen debtors, to the finance company for funding. You do not receive funding against...
- 03 Apr
Single Invoice Finance For A Fashion Designer
Glamorous is not how you might typically describe the world of invoice finance, but sometimes we can become involved with funding far more glamorous sectors, such as the case below, in the fashion design sector.This was a case where we were able to assist a small fashion designer that was looking for funding against a single invoice initially. I have written recently about how late payments are...
- 14 Feb
Using Early Payment Discounts To Improve Cash Flow
Recently, we received an enquiry from a prospective customer seeking selective invoice finance. They were having a temporary cash flow problem, but they had two invoices totalling £5K that they said they wanted to discount in order to access the cash tied up in those invoices, immediately.Selective invoice finance would seem to be the perfect solution, as there would be no obligation for them to...
- 20 Dec
Spot Invoice Finance
I had a conversation the other day, with a colleague who follows my blog posts on LinkedIn, and he said "you must get loads of business from LinkedIn?", not a lot I replied - in fact I can't remember the last time someone contacted me directly via LinkedIn. Then, coincidentally, a couple of days later, I receive a request for spot invoice finance via LinkedIn!The term "spot" is more commonly...
- 27 Mar
Short Term Invoice Finance
Many companies are not aware that you can use invoice finance on a short-term basis. There are facilities available that are of an ongoing nature, for long term use, but there are also short-term invoice finance facilities that allow you to use the service for as little time as you feel you need to.Invoice finance works by releasing a proportion of the value, of your credit sales invoices,...
- 11 Mar
Selective Debtor Finance From Scottish Pacific
UPDATE SINCE PUBLICATION: SCOTTISH PACIFIC BUSINESS FINANCE TO EXIT UK MARKETI have just had an email from Scottish Pacific Business Finance which was headed “Invoice finance with a difference“. The addition to their product offering is a selective debtor finance option.The way that the product works is that you are able to select debtors against which to receive funding and bad debt...
- 19 Feb
The Pros And Cons Of Selective Invoice Finance
Selective invoice finance (SIF) has a number of pros and cons when compared with a whole turnover (WT) facility.It should be noted that there are many similarities between both SIF and WT, for example, both types of facility deliver cash flow improvements, both have credit control, bad debt protection and confidentialty options.This is an explanation of the key differences....
- 14 Sep
Selective Invoice Finance For New Starts - No Minimums
Selective invoice finance for new starts can be the most flexible option when you first launch you new start businesses. When you launch your new start you are always going to be uncertain that it will take off and that you will achieve the level of turnover that you hope for, but you may still want the benefit of funding against your invoices before they are paid, to improve your cash flow....
- 03 Aug
Selective Invoice Finance Price
This is an example of a selective invoice finance price that we found for a customer recently.With this particular client, they already had a recourse factoring facility, but they wanted to take over handling the collections (credit control) themselves. Some companies prefer to handle the credit control themselves, others choose to outsource the function.They also only had a very small borrowing...
- 12 Jun
Selective Invoice Finance Fast
This is an example of just how we can get selective invoice finance fast for a client - we can ensure a fast turnaround for you if you need help quickly.In this particular case we were contacted by a car repair body shop that was looking for a selective invoice finance facility. They contacted us on a Sunday, we introduced one of our funding partners, that specialises in car body repair shops, on...