Hydr review: selective invoice finance for small B2B businesses

Hydr is a Manchester based fintech that lets small B2B businesses get paid early on individual invoices, without signing up to a whole ledger facility. It links to cloud accounting software and aims to fund approved invoices within 24 hours. Smart Funding Solutions is an independent broker, so we can show you how Hydr compares with other invoice finance providers before you choose.

01About Hydr

Hydr launched its platform in 2021, initially working with Xero. By early 2022 it had added integrations with Sage, FreeAgent, KashFlow and QuickBooks. Its pitch is simple: invoice finance that is fully digital and easy to understand, built for small firms that sell to other businesses on credit terms.

Hydr says it has processed more than 11,000 invoices and works with businesses across courier services, manufacturing, retail and professional services, as well as with accountants and bookkeepers who refer their clients. Press coverage at launch described its focus as B2B small businesses registered in England and Wales.

Hydr is one of the lenders on our panel. Smart Funding Solutions is an independent broker and is not part of Hydr.

02What Hydr funds

Hydr offers one core product: selective invoice finance. You choose which invoices to fund rather than handing over your whole sales ledger.

1. Create an account: Hydr says sign-up takes under 10 minutes.
2. Connect your systems: you link your bank and accounting software and complete an eligibility check.
3. Submit an invoice: once approved, Hydr pays you, aiming for within 24 hours, and then collects payment from your customer.

Hydr describes its pricing as a fixed charge per invoice. That makes it easy to see what each advance costs before you commit, but you should still compare the total against other options. Our guide to invoice finance costs explains how to compare pricing models fairly.

Limits for your business depend on your customers and trading history.

03Who Hydr suits (and who it may not)

Hydr is likely to suit you if you:

• run a small B2B business that invoices other businesses on 30, 60 or 90 day terms
• use cloud accounting software such as Xero, Sage, FreeAgent or QuickBooks
• want to fund the odd large invoice rather than commit to a long contract
• prefer a digital process with a clear cost per invoice

It may not be the right fit if most of your sales are to consumers, if you need a confidential facility where customers never know a funder is involved, or if you want a large, ongoing facility across your whole debtor book. Construction and property businesses often need specialist funders, so if that is your sector, look at construction invoice finance instead.

04What Hydr looks at

Because Hydr connects directly to your accounting and banking data, much of its assessment comes from those feeds. For selective invoice finance, funders typically look at:

• the creditworthiness of the customer you have invoiced, often more than your own
• whether the work has been completed and the invoice is undisputed
• your trading history and how reliably your customers have paid in the past
• concentration, meaning how much of your income depends on one customer

Have recent invoices, customer contact details and access to your accounting package ready. Clean, up to date bookkeeping makes the eligibility check much quicker.

05Pros and cons of Hydr

Pros

• Pick and choose which invoices to fund, with no whole ledger commitment
• Integrates with the main cloud accounting platforms
• Aims to pay within 24 hours of approval
• Simple, fixed fee structure that is easy to understand

Cons

• Single product, so less suited to businesses needing loans or asset finance as well
• Hydr collects from your customer, so the facility is not confidential
• Funding per invoice can cost more over a year than a well priced whole turnover facility for regular users

Because Hydr connects directly to your accounting and banking data, much of its assessment comes from those feeds.

06Applying through a broker vs going direct

Hydr's sign-up is quick, so going direct is easy. The question is whether a selective, per invoice product is the best value for your pattern of trade. A business funding one invoice a quarter and a business funding every invoice every month need very different facilities.

We compare selective funders like Hydr with factoring, invoice discounting and revolving credit from across our panel of 300+ lenders. We look at your debtor list and how often you need cash, then approach the providers that suit. It is free to enquire; any broker fee is disclosed separately before you proceed. You can compare options quickly through our instant quotes page, or visit Hydr's website to read more about its product.

07Alternatives to Hydr

• Kriya: also offers selective invoice finance through a digital portal, and suits businesses with larger invoices or international customers.
• Bibby Financial Services: a long established invoice finance provider, better if you want a full factoring or discounting facility with credit control support.
• Sonovate: a stronger fit for recruitment agencies and contractor businesses funding timesheet based invoices.

To compare all the main structures in one place, visit our invoice finance hub.