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How Much Does Invoice Finance Cost


The cost of an invoice finance depends on your facility, usually there are two costs:

1 – The monthly service fee

AND

2 – The discount rate

invoice finance lenders are all unique and their fees range, some lenders combine the two costs to make matters simple.

 

Here is a step by step example:

Step 1 – An invoice is raised for £50,000 with 60 days credit.

Step 2 – A copy of the invoice is then sent over to the chosen invoice finance lender. It is then evaluated and typically within 48 hours up to 95% of the cash will be released and paid you’re your account.

So, taking the example above, up to £47,500 would be available to you.

Step 3 – The invoice finance facility wait until the payment terms are reached and then chase for the money.

Once the money has been collected the invoice finance facility send you the remaining amount minus their fee.

So based on this example, you will receive £2,500 minus their fee.

 

invoice finance lenders differ in the following ways:

  • The size of the facility – some lenders can provide more cash than others.
  • The services offered – additional services range from lender to lender and these can include debt collection or industry knowledge.
  • The cost – some lenders are more expensive than others

 

Remember, more money does not necessarily mean better service. Some larger lenders may not be able to offer the same service and attention that smaller lenders can.

Beware of additional fees, some lenders look great on paper but additional charges result in you paying more for your facility.

 

How to get value for money

Consider using a broker, they have strong relationships with several lenders and can match you to the most suitable. A broker (like Alliance Commercial Finance) will more than likely be able to save you money on your current invoice finance facility.

Here at Alliance Commercial Finance we work with over twenty-five different invoice finance lenders to ensure you receive the most suitable solution for your business. Alliance Commercial Finance could save you up to a third on your current facility costs by switching provider.

To get a quote, fill in this form, here. A member of the team will be in touch and will help you find the most appropriate lender for your business.

Get in touch today on 01789 761374 or email us on info@alliancecommercialfinance.co.uk.

 

 

Added: 01 Aug 2016 16:32


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