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Invoice finance companies: Identifying the best fit for your business

08/06/2022

When searching for suitable invoice finance companies for your business, naturally you will want to work with the best one on the market.

It’s too simplistic to focus solely on whether the lender can provide the level of funding your business requires. There might be a large number of invoice finance companies which can do that, such is the amount of choice on the market today.

Instead, your search needs to go deeper and take into account a number of other factors to determine which invoice finance company is the most suitable.

For example, you’ll want a lender which understands your business and the sector you operate in, can boast excellent client satisfaction, has a reputation for delivering exemplary levels of service, and crucially can deliver the most value to your business.

The challenge for businesses is how to identify which invoice finance company can deliver all of that.

Here are a few tips to help you in your search.

Which companies provide invoice finance?

A quick Google search will return a huge number of invoice finance companies and websites which boast that they’ll tell you the ‘top invoice finance companies in the UK’.

The truth is no-one can tell you which lender is the best for your business until they’ve taken the time to understand your company, its day-to-day challenges, its short-term and long-term priorities, and what you’re looking for from an invoice finance facility.

Remember that one of the key benefits of invoice finance is how it can be tailored to individual clients. For instance, if your business lacks expertise or resource to dedicate to credit control, invoice factoring would probably be more beneficial than invoice discounting because factoring sees the lender provide a sales ledger management service in addition to advancing cash against the value of unpaid invoices.

So straight away, the ‘best’ invoice discounting company may not be the same as the best invoice factoring company.

Nowadays there is so much choice for businesses seeking invoice finance. The number of providers is vast and the market is constantly evolving, consisting of well-known, high street banks and smaller, specialist, lesser-known invoice finance companies. But each one brings their own areas of expertise and could be better suited to certain businesses more than others.

Which invoice finance options exist?

Your search for the best invoice finance companies should also depend on the overall value and service you’d like from your funding partner and facility.

All invoice finance facilities release cash against the value of unpaid invoices within 24 hours of their issue, with the remainder forwarded once the customer pays, less the invoice finance company’s fees.

As already mentioned, a major benefit with invoice finance is the additional services which the lenders can deliver. From a dedicated sales ledger management service to bad debt protection, some facilities provide extra resource, expertise and peace of mind when trading with customers.

Similarly, with selective invoice finance facilities, it is possible to release cash against individual invoices rather than your entire ledger. Again, if this is preferable or more beneficial to your business, your search for suitable invoice finance companies may take a different direction.

What are the key things to consider when comparing invoice finance companies?

Here are just a few of the things you’ll want to think about when searching for the best invoice finance companies for your business and its requirements:

Expertise and track record

Consider how reputable the invoice finance company is. How long have they been providing invoice finance facilities? Have they won any industry awards? What do their clients say about them on review platforms such as Trustpilot and Google Reviews?

Knowledge of your industry

Some invoice finance companies specialise in certain industries, especially those which can be slightly more complicated to fund. Even if they don’t, find out whether they have other clients which operate in the same sector as you. When talking to them, do you feel as though they fully grasp your business, as well as its trading patterns and invoicing?

Ease of delivery

Recent improvements in technology have made invoice finance facilities much simpler to run and manage, both for the lender and client, but some providers are more advanced than others in this regard. So consider how straightforward your facility will be to manage, including whether the invoice finance company can connect to your accounting package.

Amount of funding

It might seem strange that this isn’t at the top of this list. Although the amount of funding you can access is of course important, it will be of little value if you end up with an invoice finance company that fails to provide you with all the support your business requires. So be sure to weigh this up against the other key factors to consider, as a different provider which can’t provide as much funding, for instance, could actually be far more beneficial for your business.

Level of service

To build on the point above, it can’t be underestimated just how beneficial a supportive funding partner can be – one with a proven history of delivering a high level of service. For instance, will you have an account manager you can speak to when required? Is the facility going to be flexible? Can you see yourself working with the invoice finance company?

Cost of the facility

Naturally, the cost of invoice finance facilities vary from lender to lender. They could also be different due to the structure of the facility, and whether any additional services such as bad debt protection are included. So when comparing costs side by side, make sure you fully understand the terminology used and how it applies to the facility.

Overall value

Ultimately, all of the above should be combined so that you can assess the overall value to your business. What would an invoice finance facility enable you to achieve? What benefit could a dedicated sales ledger management service deliver for your business? Would bad debt protection give you peace of mind and help to save you money? And does one invoice finance company’s experience and track record of supporting businesses such as yours make them more favourable than another, whose facility would perhaps cost less to run?

How a specialist broker can help

Clearly there is plenty to consider when choosing and comparing different invoice finance companies. It can take a lot of research and time to explore each one, in terms of their credentials and their suitability for your business.

By using an independent invoice finance broker such as Hilton-Baird Financial Solutions, the process will not only be much simpler, but it will also fast-track your search, ensuring you speak to the most suitable invoice finance companies.

With over 25 years’ experience of introducing the right invoice finance companies and facilities to businesses of all sizes, we have an extensive but carefully selected panel to ensure our clients can access a wide range of suitable solutions. We take great care in qualifying this panel to ensure that any funder we introduce has a good history of service, deliverability and treating clients fairly, and that they’re able to match our client-centric ethos.

Voted Invoice Finance Broker of the Year at the Business Moneyfacts Awards in 2018, 2020, 2022 and 2023, our expertise and knowledge of the market means we’ll save you time, support you throughout the process and help you to compare different options and offers from the invoice finance companies we introduce.

All introductions will be made after we’ve heard about your business, its challenges and its requirements to ensure that the companies and facilities we identify will support you now and in the future.

So if you’re looking for the best invoice finance companies for your business, give us a call on 0800 9774833 or request a call back at a time that suits you.

How much could your business secure with invoice finance?

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Some of the funders we work with

  • Lloyds Bank Commercial Finance
  • Pulse Cashflow Finance
  • Close Brothers Invoice Finance
  • Clear Factor
  • Barclays
  • Davenham Asset Finance
  • Ultimate Finance Group
  • Haydock Finance Ltd
  • Woodsford Tradebridge
  • Team Factors
  • Aldermore Invoice Finance
  • Roma Finance
  • 4Syte
  • Accelerated Payments
  • Leumi ABL
  • Nationwide Finance
  • Cynergy Business Finance
  • Regency Factors
  • Sonovate
  • IGF Invoice Finance
  • Merchant Money
  • Peak Cashflow
  • Tradeplus24
  • MaxCap
  • Skipton Business Finance
  • InvoCap
  • Kriya
  • Blazehill Capital
  • Metro Bank SME Finance
  • PNC Business Credit
  • Partnership Invoice Finance
  • Time Finance
  • Optimum Finance
  • Berkeley Trade Finance Ltd
  • Giant
  • eCapital Commercial Finance
  • ABN AMRO Commercial Finance
  • Investec
  • Castlebridge
  • Praetura Invoice Finance
  • Santander Corporate & Commercial
  • Davenham Trade Finance
  • Royal Bank of Scotland

Authorised and regulated by the Financial Conduct Authority (FCA number 730445)
We are a credit broker and not a lender and offer credit facilities from a panel of lenders