Invoice Finance - FAQs

What is invoice finance?

Invoice finance is a form of short-term borrowing that allows you to borrow money against sales invoices before they’ve actually been paid.

The way this works is quite simple. You sell your outstanding invoices to Aldermore, and we pay you up to 90% of the full invoice value, up front. Once we have received full payment for the invoice, we’ll then return the remaining 10% to you, minus a small fee.

What is the difference between invoice factoring and invoice discounting?

There are two main types of invoice finance: invoice factoring and invoice discounting. While both methods allow you to unlock the cash tied up in unpaid invoices, there is a key difference between the two.

With invoice factoring, you’ll benefit from a full credit control service. This means your lender will be responsible for chasing payment for invoices, while you focus on running your business.

With invoice discounting, you remain responsible for the outstanding invoice debt, which means you need to chase up payment yourself, and the service remains confidential.

What types of business are eligible for invoice finance?

The general rule is that any organisation that provides a service or product and raises invoices can be eligible for invoice finance. However, conditions can be different with every provider. Many providers will require businesses applying for invoice finance to have a minimum turnover, for example. As with any business decision, it’s always best to seek expert advice.

At Aldermore, we provide flexible invoice finance solutions, designed to meet the needs of a variety of different industries, including construction, wholesalers and importers, manufacturing, and more.