Knowledge Hub

What is invoice finance

Everything you need to know about invoice finance

What is invoice finance?

Invoice finance is a type of funding that helps businesses to receive their cash almost immediately for the products or services they have delivered and invoiced, rather than waiting for the duration of the payment terms on their invoices.

How does invoice finance work?

Invoice finance comes in many forms. The basic concept is that a provider will buy your invoice for a discounted rate and pay you that money without delay. They will then wait for your customer to pay on the terms stated within the invoice, meaning you get paid without having to wait for the time period that has been agreed with your customer.

Small businesses choose to use invoice finance rather than extending their borrowings because it provides an advance on the cash you have already earned, rather than taking on new debt.  It’s that simple.

How do I use invoice finance?

Done well, invoice financing should be easy to apply for and flexible to use – because it is about unlocking the funds for work you have already completed, there is no need to present a business plan or jump over hurdles that other forms of lending require. Furthermore, the pricing should be transparent and predictable.

At Hydr, we have created a platform that makes it as straightforward as possible to sign up to with our paperless onboarding and integration with cloud accounting software providers.  We give decisions in real time enabling you to access your hard earned cash almost immediately without having to wait out the payment terms of your invoices.  For this, we charge a fee that is fair and fixed with absolutely no hidden extras.

Does invoice finance help my cash flow?

Yes, it does! Unlike other types of lending such as bank loans or credit cards, with invoice finance, you don’t have to sign up for new and/or long term debt or lose any control of your business. For the price of a transparent, fixed fee you choose how many invoices you wish to finance.

Does invoice finance help me manage late payments?

Absolutely. As part of the proposition, invoice financing companies will offer to manage late payments for you. Many charge extra for this service – at Hydr, this is included in the fee. We take care to manage the collection in a way that is thoughtful and professional, whilst putting the cash you have earned into your bank account within 24 hours.

What does it mean to verify my invoice?

This is the process of making sure that the invoices you want to finance are authentic and valid. It’s an extremely important step that every provider will go through. Because of our cloud accounting integration, we have made it seamless so that we can tell you quickly whether or not we can finance your invoice(s).

Do I have to fund all of my outstanding invoices?

No. The beauty of our proposition is that you choose the number of debtors you wish to fund and we look after all of the invoices with that chosen debtor. You can choose to finance as many or as few debtors as you like.