Invoice finance

Invoice finance turns receivables into cash now. A finance provider advances most of the value of your unpaid invoices and takes a fee; when the customer pays, the balance comes back to you minus the provider’s charges.

There are two main forms. In factoring, the provider buys the invoices and usually collects from your customers. In invoice discounting, you borrow against the invoices and keep collecting yourself, often without customers knowing.

It solves a timing problem, not a payment problem. If customers pay late, finance costs rise; if they don’t pay at all, recourse arrangements bring the loss back to you. Faster collection is the cheaper fix where it is possible.