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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