Invoice Finance

Invoice finance allows you to leverage your unpaid invoices and free up cash flow. Your lender will pay you a percentage of the amount the customer owes on each unpaid invoice. This way, you can pay suppliers on time without disrupting cash flow, while your lender takes on the debt. When you’ve received your invoices, you can pay your lender back over a longer, more favourable term.

There are two types of invoice financing—invoice factoring and invoice discounting. With invoice factoring, the lender handles payment collection on your invoices, which means they may call your customer to request payment when deadlines come up and pursue any further collection processes. With invoice discounting, you continue to manage the collection of payment from the invoiced customer, and the lender trusts you to chase down the invoice and make sure it’s paid.

With invoice financing, you can tap into cash from unpaid invoices, using accounts receivable as collateral, which means you get quick access to working capital. A line of credit, on the other hand, is a flexible safety net that lets you access funds as needed, paying interest only on what you use. Invoice finance is more suited to businesses with outstanding invoices, while a line of credit is typically more versatile and adaptable to different financial needs.

Your invoices act as collateral, so you typically don't need to secure the loan with physical assets.

There are both disclosed and undisclosed financing options, depending on the lender. Our team of expert brokers can help you navigate whichever option you go for without affecting your relationships with your clients.

The key difference is that invoice financing focuses primarily on domestic transactions to address immediate cash flow needs, while trade financing is designed for international or cross-border trade, allowing you to spread your costs over time while still being able to benefit from discounts and lower shipping per unit.