Invoice Finance For Startups

There are a number of specialist lenders that will provide Invoice Finance for Startups in the UK. You do not need to have any trading history to get a facility in place.

However its important that you work with one that matches your sector, plus the debtor quality and quantity of your invoices will also be important.

As a new start business invoice finance is one of the few types of funding that you can access straight away without any financial accounts. If you are starting a business in a sector that commonly requires granting credit to customers. Then funding the gap between suppling the goods or service can be difficult.

Its very common in some B2B industries for customer invoices to be settled in 30, 60 or even occasionally 90 days from being raised. This is common in sectors such as:

  • Construction & Contracting
  • Recruitment & Employment Agencies
  • Wholesale
  • Engineering
  • Manufacturing
  • Logistics & Freight
  • Haulage & Trucking

Invoice finance for startups helps to ease cashflow pressures in growing businesses, by giving access to cash tied up in unpaid invoices.

Lets look at the different types of finance below.

Different Types of Invoice Finance For UK Start Ups

Factoring For Startups

The most common type of invoice finance available for new startup businesses is Factoring. It works like a revolving credit facility and grants you ongoing access to up to 90% of your unpaid customer invoices. Some banks/lenders may require an initial contract of 12 months, although this varies between lenders.

This is how it works:

  1. Apply for a credit limit on your customer with the Factoring lender.
  2. Supply the goods or service to your customer
  3. Provide the invoice to the lender
  4. Access up to 90% of the invoice value straight away
  5. Repay the lender when the customer pays, plus any fees

If you are going to need ongoing access to unpaid invoices, then this finance option is worth considering.

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Single Invoice Factoring For Startups

If you need quick access to cash or just need to release funds from a one off invoice, single/selective factoring my be an option for you.

Single invoice finance is suitable for new start up businesses with no trading history. Although your customer will likely need to be an established business with a reasonable credit score.

Contact Us to check if your outstanding invoice is factorable.

Invoice Discounting For Startups

As a new start businesses its unlikely that you will be approved for a discounting finance facility. This is because discounting providers are normally looking for history of strong in house credit control and a well established client base.

There may be some exceptions to this, i.e. if your startup is fast growing and already has a in house creit control function.

You can read more about Invoice Discounting by clicking here.

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