Invoice Finance features

• Features and benefits
  • Invoice Finance quickly converts sales into cash and can release more funds than conventional sources of finance.
  • You can take advantage of cash and bulk discounts from suppliers.
  • Pay your suppliers promptly thereby improving your company's business to business relations and payment reputation.
  • Your business can remain highly competitive and offer attractive credit terms to consolidate and develop customers’ goodwill.
  • The availability of finance to your business can grow in line with the growth in sales.
  • Your relationship with your customers is not affected by the Invoice Finance arrangement as they are unaware of the funding facility.
  • Funds that are released are used only as you need them.
• Is your business suitable?

  Your business may be suitable for Invoice Finance if:

  • You have an average on-going funding requirement of £100,000 or more.
  • You sell goods or services on credit to other businesses.
  • Your business has an ongoing trade debtors' ledger of minimum £150,000.
  • You invoice after goods/services are delivered.
  • You have a satisfactory quality and spread of debtors.
  • You have a sales ledger accounting system and appropriate credit control procedures in place.
  • Your business has a positive tangible net worth.

   

  Examples of unsuitable debts for Invoice Finance are:

  • Cash sales.
  • Sales to individuals.
    
  • Invoicing in advance of delivery of goods or services.
  • Export debts may not be suitable if they relate to territories outside of the Organisation for Economic Co-operation and Development (OECD).
  • Sales which are suject to formal written contracts (Contractual Debt).
• How it works
  1. You invoice your customers.
  2. Summary invoice details are then sent to AIB (NI).
  3. The pre-agreed percentage of up to 90% of the total value of outstanding invoices is made available to you immediately.
  4. You continue to operate your usual credit control procedures. Invoices are paid by customers to a designated collection account.
  5. The balancing percentage of the originally financed debt is made available to you, less AIB (NI) costs.
• Customer example

  	£'000s
  Total Debtors	1,000
  Less: Disapproved Debts*	(100)
  Approved Debts	900
  Available Funds @ 90% of Approved Debts	810

  * Disapproved debts can include aged debts beyond a specified time limit, inter-company debts, disputed debts, contra balances (where you are selling to your suppliers) and cash sales.

• Costs
  • A Discount Charge (similar to an interest charge) is levied on the funds used by the business and charged monthly.
  • A Service Fee (related to the on-going management of the facility) is typically charged on an annual fixed fee basis and is charged at the end of each month.