Invoice Factoring

Why do companies use Invoice Factoring?

There are a variety of reasons that businesses may choose Invoice Factoring as a funding solution, but the primary reason is that it’s a major boost to cash flow, as cash can be raised almost as soon as services are completed or goods are delivered.

This makes everything from payroll to business growth much easier, both of which can be major concerns for SMEs. There are other options to Invoice Finance, including loans, overdrafts and peer-to-peer lending, but few offer the same level of flexibility that Invoice Factoring does. The great benefit with Invoice Finance is that the funding grows in line with the business turnover.

In addition, smaller companies often find that it’s easier to manage their business while Hitachi Capital Invoice Finance is managing their credit control, because they’re less likely to have the full in-house resource to maintain it as effectively as our experts. Invoice Factoring is both a funding and business solution.

How does Invoice Factoring work?

• You supply goods and services to your customers.
• You send your customer the invoice made payable to Hitachi Capital Invoice Finance, and send a copy to us.
• We will give you up to 90% of the invoice amount. At this stage, a service fee is deducted from your account as a percentage of your turnover.
• The customer settles the invoice in full by making their payment direct to us. When the remaining balance is paid, a small finance fee is deducted from your account, charged as a percentage of the amount lent
• This invoice clears and we give you the remaining 10% balance minus the finance fee.