Is Your Invoice Finance Provider Holding Back Your Growth? Is Your Invoice Finance Provider Holding Back Your Growth? Skip to content

Is your invoice finance provider holding back your growth?

For a long time, a well-established bank has been the choice of many for an invoice finance provider.

However, times have changed and, as a society, we’re smarter and more clued up on what we should expect from a business. Invoice finance is no longer just about the money – a good invoice provider should provide much more. And you shouldn’t have to pay an arm and a leg to use their services.

To help you decide if you’re getting enough out of your invoice provider, we’ve shared 7 questions you need to ask – and what you should be expecting for each.


What’s in the package?

The process of choosing an invoice finance provider should be similar to the process of choosing a phone contract.

Why? You never just go with the first phone contract you come across – you do your research and find the best deal for you. So, when it comes to finding the right invoice finance provider for your business, you need to take the same approach.

Ask yourself: “Is my financier providing me with the best deal?”

Do they provide:

  • Invoice factoring – where they buy your sales ledger for a fee, advance a percentage of your profit, liaise directly with your clients and run credit checks?
  • Invoice discounting – where you are given finance to directly pay your contractors, for a percentage fee on top of repayment?
  • Disclosed factoring – where your invoice provider collects invoice payments on your behalf, in their name?
  • Confidential factoring – where your clients are unaware that you are receiving finance to pay your candidates?

Whichever option your invoice finance provider is giving you, is it enough? And is it right for your business? If they’re not able to offer more, then it’s time to look elsewhere.


What are the limits?

An invoice provider is meant to help your business, no hold it back. So, if they have any limitations in place, it is worth questioning what value they are truly adding.

One of the biggest limitations that most providers have in place are concentration limits – meaning you can only do a certain amount of business with your clients.

If you meet the expectations of your clients, they go to another agency who can fill all their available roles.


How is their customer service?
A good invoice finance provider has an excellent customer service team to support them. This is where a lot of providers fall short.

Does your provider offer the following?

  • A dedicated account manager
  • A customer service team
  • Multiple ways of contacting them – phone, email, etc.
  • Clear FAQs that are easy to find on their website
  • Guides and tips on how to make the most of their products

If you’re always reaching their voicemail and having to chase them for information, their customer service just isn’t up to scratch.


Do they give more than just finance?
On top of the finance, what else does your invoice finance provider supply? What technology do they have in place to further support your business?

  • Do they give you an online platform to support your contractors?
  • Do they automate your invoices and payroll?
  • Do they integrate with your existing systems?
  • Can you manage all of your clients and contractors using their tech?

We invest a lot of resources into the constant development of our tech at Sonovate, as we know it’s vital to the success of our product.

Toby Babb, Director of Harrington Starr, is a loyal customer of Sonovate – having been with us since 2014. In part, what first attracted him to partner with us was our technology:

“To gain a competitive advantage we have always chosen and looked to work with the very best suppliers and most innovative technology available, which Sonovate specialise in.”


What other restrictions do they have in place?
On top of the concentration limits we mentioned earlier, there are a lot of other restrictions you should avoid, including:

  • Personal guarantees
  • Lengthy terms and conditions
  • Bad debt protection
  • Long-term contracts
  • Renewal fees
  • Late payment charges

The list is long, as demonstrated in 21 Costs You Can Avoid When Funding Your Contractors – one of our free eBooks.

If your invoice finance provider is charging you any of these costs, it’s time to question whether they’re worth using anymore.


Do they have an SLA?
Any good invoice provider will have a Service Level Agreement in place, so that you know what you can expect from them.

It should cover everything from when they’ll process invoices to when they’ll pay your contractors. And it should tell you what you can expect from them in terms of onboarding and maintaining a relationship whilst you use their services.

You should choose a provider with an SLA in place, so you have a written agreement of what they will do for your business.


New research from the British Business Bank found that bank lending volumes have plateaued, whilst alternative invoice providers are demonstrating strong growth.

At Sonovate, we pride ourselves on the flexibility of what we offer. Our aim is to remove all the restrictions that an invoice provider usually has in place, and provide finance, back office and support – see how Sonovate compares with your invoice finance provider.

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