Advance Rate

What does “Advance Rate” mean in Invoice finance/factoring?

Most invoice finance/factoring facilities have what is called an Advance Rate. This is the percentage of each invoice that the finance company will let you draw down under the facility.

Advance Rate Example

If your Advance Rate is 80%, this means you can access 80% of an unpaid invoice.

Invoice Amount: £20,000

Advance Rate: 80%

Available Funding: £16,000

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