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How does Invoice Finance work?

Invoice finance is sometimes thought to be a complex and expensive way to raise finance. However, we're on a mission to prove how simple and cost effective it can be. There are two main forms of invoice finance; invoice factoring and invoice discounting. Invoice factoring is a disclosed arrangement , whereas invoice discounting is undisclosed, meaning it’s a confidential service where your customer's wont know of our involvement.

Video Transcript:

"Invoice finance is a really simple process, with you as a business invoicing your customer for products or services provided. When you raise the invoice, a copy is sent straight to us at Hitachi Capital. We will give you 85% of the invoice amount immediately with the remaining 15% given to you once we've received full payment from your customer less our fee, normally around 1.5% but can be as low as 0.5%.

This process can also be confidential, so that your customers are unaware of our involvement; however this works in a slightly different way. You continue to collect payments from your customer, but the money received goes in to a bank account held by us- it's that simple."

Step by step guide to Invoice Factoring

  1. You supply goods and services to your customers.
  2. You send your customer the invoice made payable to Hitachi Capital Invoice Finance, and send a copy to us.
  3. We will give you up to 85% of the invoice amount within a day. At this stage a service fee is deducted from your account as a percentage of your turnover.
  4. The customer settles the invoice in full by making payment direct to us.
  5. When the remaining balance is paid, we pay the 15% balance to you, less a small fee.

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Step by step guide to Invoice Discounting

  1. You supply goods and services to your customers.
  2. You send your customer the invoice made payable to your business, and send a copy to us.
  3. We will give you up to 85% of the invoice amount. At this stage a service fee is deducted from your account as a percentage of your turnover.
  4. You continue to collect and chase the payments from your customers. Our involvement is strictly confidential.
  5. The customer settles the invoice in full, making payment to you in an account held by us.
  6. When the remaining balance is paid, we pay the 15% balance to you, less a small fee.

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Online Account Demonstration

Here at Hitachi Capital we use Dancerace E3 to enable our clients to be able to view their account in real time.

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Get in touch

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Infographic: How Invoice Finance Works

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For an informal discussion in regards to your cash flow needs please contact us on

0808 256 6442