For recruitment agencies, consultancies & labour marketplaces

Invoice finance

An invoice finance service allows lenders to purchase unpaid invoices from businesses that need an advance on their payments.

A business invoice finance facility gives instant access to funds and reduces potential cash flow issues in exchange for a financing fee.

Establish Organisational Stability

An invoice finance service allows lenders to purchase unpaid invoices from businesses that need an advance on their payments.

A business invoice finance facility gives instant access to funds and reduces potential cash flow issues in exchange for a financing fee.

Promptly Receive Cash Flow

Invoice finance companies like Sonovate, let you turn your unpaid invoices into cash. Instead of waiting weeks or even months to get paid, you receive up to 100% of your invoice value upfront. When compared to traditional credit options, an alternative invoice financier offers quick access to cash flow in lieu of your outstanding invoices. 

Types of invoice financing solutions

Invoice factoring

This is where a business sells its outstanding invoices to an invoice financing company at a discounted rate. Once the clients pay the invoices, the factoring company deducts their fees and advances the remaining balance to the business.

Read more

Invoice discounting

In this case, a business uses its outstanding invoices as collateral for borrowing money from a financial institution or invoice discounting company. When clients pay their invoices, the business repays the borrowed amount along with any fees or interest to the business financing company.

Read more

Benefits of invoice financing for customers and businesses

Access to capital

When you partner with an invoice finance company, you can promptly gain the necessary funds to seize new opportunities and drive success. Completing projects on time, paying your expenses, and growing your business is easier when you have a healthy cash flow.

Startup friendly

It’s extremely beneficial for SMEs and start-ups who may not be eligible for other forms of business financing, like a bank loan or overdrafts. Invoice finance services enable you to mitigate the impact of a late payment or seasonal fluctuations, helping to establish stability for startups.

No more chasing

If you’re a small business that doesn’t have the resources to be constantly chasing clients and without payment for weeks or months, invoice factoring from a business invoice finance facility can help free up your valuable time while providing a steady cash flow.

Spread the love

Easy invoice finance facilities can help you screen potential clients and provide valuable insight into their credit and payment history — giving you the assurance you need to continue building a strong customer base and foster positive, long-term relationships.

Our invoice finance solutions

For mid-sized & enterprise businesses

Funding Only

Our funding only options allow for easy integration with your existing accounting software, helping you to keep your finances reconciled. Through our funding solutions, you can streamline your accounting and  draw cash on demand — all while staying in control of your invoice financing.

Find out more

For start ups & small-sized businesses

Funding and back office

Streamline your finances, withdraw funding as you require, reduce administrative time and stay entirely informed on your funding options through our funding and back office management solutions — personalised to your specific business needs.

Find out more

FAQs about invoice finance services

Do you need good credit to get invoice financing?

Not necessarily, whilst your business’ credit history is taken into consideration, the credit focus is instead on the credit quality and repayment history of your customers. 

This makes invoice financing a great option for new businesses that don’t have an established credit rating or trading record yet. 

What is invoice financing?

Invoice financing is a form of financial service that enables businesses to obtain immediate cash flow by leveraging their outstanding invoices. 

Rather than waiting for clients to pay invoices, which could take weeks or months, a company can sell or utilise these invoices to secure funding from a financial institution or invoice finance provider.

How can invoice financing help?

Invoice finance solutions can help businesses improve their cash flow, maintain smooth operations, and invest in growth opportunities by providing immediate access to working capital that would otherwise be tied up in outstanding invoices. 

Invoice finance can be a more cost-effective and flexible form of borrowing for businesses that need to access funding quickly and efficiently.

What happens if a debtor refuses to pay an invoice?

Before you finalise any contracts relating to these services, you should always disclose what happens if a debtor refuses to pay an invoice. 

The most cost-effective solution would be for you to return the full amount of the cash advance, within an agreed period of time. This is known as recourse factoring and your business becomes liable for the unpaid invoice. 

Another option is non-recourse factoring. In this instance, the factoring company takes responsibility for any non-paying customers and they cannot ask you for payment. However, as the lender takes on more risk, the deductible factoring fees can become much higher. 

Nevertheless, factoring companies have a team of professionals who dedicate themselves to collecting the client’s late payment in the most efficient way possible. Not only this but invoice financing companies will vet your clients thoroughly before agreeing to advance their invoices.

How long does it take to set up invoice financing?

Invoice financing doesn’t take long to set up at all, especially in comparison to other forms of financing in the UK. 

After your first appointment, your business could start using these services in as little as 24 hours. 

Once you are all set up, you can get access to your funds in just a matter of 24 hours.

Is invoice finance suitable for start-ups?

Yes, invoice financing is an ideal solution for start-ups. 

Unlike traditional forms of financing, such as a bank loan or overdrafts, this doesn’t demand you to be a well-established business with an immaculate credit rating to receive the finance you need. 

It focuses on the credit quality of your customers instead, making it a highly viable solution for start-ups and SMEs. 

This form of financing also helps new and emerging companies quickly convert credit sales into cash, which can help fuel growth and accelerate the development of your business.

What checks are involved with getting invoice finance?

The checks on your own business are rather limited, instead, invoice finance companies focus on checking the history of your customers. 

Lenders will make sure your clients have a substantial credit score and reputable repayment history before they agree to finance any invoices. 

This makes it much easier for new businesses and smaller companies to qualify for invoice financing than it is for them to secure loans from the bank. 

Nevertheless, if your business has a strong credit score, steady turnover, and a considerable reputation, you will most likely benefit from more favourable rates.

Is invoice financing regulated?

No, invoice financing is not regulated by the Financial Conduct Authority (FCA) in the UK. 

Since the invoice finance industry is unregulated, borrowers should ensure all contracts have a clear termination clause and that all fees are clearly stated. 

However, the sector has established a clear code of conduct to ensure the best possible service. Not only this but being an unregulated industry removes the costs of regulation that are typically passed on to customers, allowing business owners to receive the maximum amount of cash in the shortest amount of time.

Can small businesses get invoice finance?

Yes, small businesses can benefit greatly from invoice financing. 

However, to be eligible for the service you must be a business invoicing other businesses with a minimum turnover of £50,000 a year. If so, Sonovate provides invoice finance for new business. 

I’m a contractor; how do I benefit from invoice finance?

Invoice finance can help contractors be certain that they will be paid on time, every time. 

When it comes to recruitment agencies, time and money are of the essence. All payments need to be delivered on time so that employees can be paid and expenses can be covered. 

Invoice finance lenders can advance recruitment agencies the money they need to pay their contractors quickly and efficiently. 

This way recruitment agencies can stop worrying about cash flow gaps and focus on growing their business. 

Accounts payable financing vs invoice financing, what’s the difference?

Accounts payable financing is also commonly known as vendor financing or trade credit because you borrow money directly from the vendor. 

Vendors will provide buyers with credit so that they can purchase their goods and/or services. The buyer then uses the profits to pay the vendor back the loan plus an agreed interest rate. 

Just like invoice financing, you won’t typically be forced to put up any physical assets as collateral. The main difference between invoice financing and accounts payable financing is that the latter requires a credit check to see if you qualify for the loan. 

SMEs and start-ups typically have an unproven or lower credit rating, especially if they are still trying to establish themselves in their industry. Therefore, these companies may benefit more from invoice financing than accounts payable financing. 

What are the risks of invoice financing?

At Sonovate, we ensure our clients know all they need to know about our financial services, including risks. Invoice financing comes with two main risks/unknowns: fees and the adoption of new technological solutions.

Here’s what you need to know about fees: We offer a flexible agreement, meaning you can use our services on a client-by-client, individual invoice basis without being locked into long-term agreements. If one of your clients fails to pay, this won’t affect the profit received from your other clients. On our intuitive platform, you’re shown exactly what you’re being charged with zero hidden fees — allowing you to understand your costs at a glance. 

And, on the adoption of new technologies: Many fear either the lack of ease or the software’s susceptibility to cyberattacks — or both. Our secure platform utilises the latest enterprise grade IT security protocols while also adopting the best in class technology to conduct credit checks, Anti-Money Laundering and KYC procedures for your clients, giving you the security you require. Additionally, with our intuitive platform, you can manage your invoices and associated invoice financing with ease.

Do Sonovate offer tailored credit control solutions?

When you partner with Sonovate, you gain tailored credit control solutions — enabling you to mitigate against cash flow gaps and in turn, manage seasonal fluctuations with confidence. 

Using our platform, you’re able to instantly withdraw your payments and receive the funds within just one or two business days. And, whether you use Xero, Quickbooks, Zoho Books or the likes, integration is made easy, and in turn, you’re able to gain holistic management and views of your cash flow. 

Closing the gap yielded by an unpaid invoice enables organisations to weather the ups and downs of the market and invest in growth opportunities — regardless of such fluctuations. Don’t let an outstanding invoice stop your business from moving forward; trust Sonovate as your invoice finance solution to bridge the gap between service and payment.

News & Insights

The latest in technology, funding solutions, and business ideas on our blog

Why Choose Sonovate for Your Funding Needs? 

Thousands of businesses choose Sonovate because, unlike the banks, we’re easy to work with and we’re on hand to help you anytime with easy invoice finance — and we streamline the process to keep you moving.  

The platform we’ve built makes it easy to manage and fund contractors. And, unlike other invoice financing companies, we pay 100% of the invoice.

Here’s a look into more of what we offer: 

  • Simple setup
  • No hidden fees or charges
  • We don’t tie you into long contracts.
  • We won’t place a credit limit on you!
  • Bad debt protection included
  • We provide invoice finance for new business 

Plus much, much more!