Selective Invoice Finance

You can release money as working capital for your company by selling specific unpaid invoices at a discount thanks to selective invoice finance. A portion of the funds can be made accessible so you can successfully manage cash flow and continue with your company’s operations rather than having to wait up to 90 days to get paid for goods and services you have supplied.

The definition of selective invoice financing

Selective invoice financing, sometimes referred to as single or spot factoring, gives companies the chance to discharge the money held in a certain overdue invoice.
Contrary to invoice factoring and discounting, the company is not required to sell the complete sales ledger. You can use the facility from invoice to invoice to acquire funds from single invoices of your choice, as and when your business needs a financial infusion. Selective invoice discounting allows you to choose which invoices you’d like to release cash from.

You don’t have to give up control of your client connections if you choose to factor in certain customer invoices. The factoring agreement remains totally confidential between yourself and your chosen invoice finance company because the majority of providers let you maintain control over recovering unpaid invoices. Businesses that suffer seasonal changes are best suited for selective invoice financing. It provides an alternative financing arrangement that helps with cash flow management in the short-term.

It can be used for any business rationale, from business expansion to funding new business assets or employee training initiatives in addition to supporting your company’s ongoing obligations, such as paying payroll and invoices on time. Please fill out an online application for a free, no-obligation quote to find out whether you are eligible for selective invoice financing.

What is the process for selective invoice financing?

Instead of sending small value invoices to an invoice finance provider, the majority of businesses that use selective invoice financing opt to send higher value invoices. Up to 95% of the invoice’s value may be paid in advance if rates and fees have been agreed upon. Once the outstanding debt has been settled by your customer, the remaining amount is received from the lender minus the agreed fees and charges.

Select an invoice – choose the invoice or invoices you want to fund.
Receive funding – Then, usually within 24 hours, you’ll get an advance of up to 95% of the invoice’s amount. Once on board with a lender, these types of finance products can act as revolving credit facilities.
Next instalment – Receive the remaining amount of the invoice after deducting the agreed-upon service fee owed to the lender.

What separates spot, single, and selective invoice financing from one another?

Spot, single, and selective invoice financing are some of the most popular names for the same type of borrowing. It basically means that you can pick and choose which invoices to utilise, whether that’s individual invoices or multiple invoices. We’ll partner you with your ideal selective invoice finance facility, giving you access to the credit facility you’ve been searching for helping businesses cash flow.

What are the advantages of selective invoice finance?

You can manage capital within your business, pay overheads, make payments, invest in inventory and company equipment, and more with the aid of selective invoice financing. You decide the specific invoice you want to consider, get the money you need right away, and keep charge of your business dealings and collection plans.

The key advantage of selective invoice financing is that it gives you access to working capital tailored to your company’s needs. We’ve detailed the many benefits of selective invoice below:

Multiple or one sales invoice – Choose whether to sell single or several invoices. You do not have to sell your entire sales ledger, in contrast to full invoice factoring and invoice discounting. Single invoice finance providers give you the freedom to decide which invoices you’d like to fund.

No long-term agreements – You can move your business forward because there are no lengthy contracts involved and you have the freedom to choose which invoices you want to handle.

Adaptable financing – Up to 95% of the balance payable on the invoice may be released. It is adaptable and accessible whenever needed. How much you can borrow will depend on the value of the invoice.

Funding within 24 hours – If your business qualifies for selective invoice finance, funds are accessible very fast; the agreed advance may be in your account within 24 hours of approval.

Control your credit carefully – The vast majority of lenders will let you continue to be in charge of monies owed. Selective invoice financing is still a totally confidential way of accessing finance as your clients are none the wiser.

Minimal information – There is less paperwork than with other business financing options, making the process swift and hassle-free.

Use our invoice finance calculator below

Invoice finance calculator

Apply for invoice finance

What are the disadvantages of selective invoice finance?

Possibly costly – You can end up spending significantly more on fees and other costs thanks to the service’s flexibility and convenience compared to selling your entire client debtor book. It may be less expensive to use an ongoing invoice finance arrangement if you need to raise money from a few low-value invoices.

It can take some time – It may not be appropriate for businesses looking for urgent working capital because it can take up to 2 weeks to set up your chosen invoice finance facility, depending on the lender.

B2B invoices – It’s important to keep in mind that only firms who invoice businesses for goods, services, and products over an agreed term are eligible. This is not appropriate for you if the majority of your clientele are consumers.

With over 300 lenders on our panel, we’re rarely short of finance options for our clients, we’ll assist you in finding your ideal invoice finance lender, or alternative business funding solutions such as an unsecured business loan.

Is my business eligible for selective invoice financing?

You may qualify for selective invoice funding if you are a sole trader, partnership or limited company registered in the UK. You must run a business with a minimum yearly turnover of £100k in order to qualify.

If you are not qualified for selective invoice finance, we provide a wide selection of alternative financing options and may assist you in identifying the best option for your company.

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What are recourse and non-recourse invoice finance facilities?

Recourse means that you will still be responsible for any unpaid invoices from your clients. You will be responsible for paying back the invoice’s full amount if the lender is not able to receive payment.
A non-recourse arrangement, however, makes the lender responsible in the event that a customer defaults on payments because of insolvency or a protracted period of default. It contains bad debt protection and an insurance policy for invoices that aids in lowering the risk associated with late payments.

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If my business has a poor credit history, can I still get invoice financing?

The short answer, is yes. The invoice(s) will effectively be used as an asset to secure against, therefore your company’s financial history might not be taken into account.
It’s important to keep in mind, though, that some lenders will only accept the invoice(s) if your client has a solid credit rating. We’ll always strive to get you the best funding options and finance solution, regardless of your previous credit history.

Smart Funding Solutions are authorised and regulated by the financial conduct authority, FRN: 972740. We’re a credit broker, not a direct lender.

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