Question 1

What is Invoice Factoring?

Accepted Answer

Invoice Factoring is a way for businesses to unlock funds tied up in unpaid customer invoices.

Instead of waiting 30, 60 or even 90 days to be paid, you receive around 85% of the invoice value within 24 hours of raising them, allowing you to use the money more immediately for your business needs and improving your cashflow.

Invoice Factoring bridges the gap between raising invoices and being paid. For many SMEs, it’s a way to fund growth without relying on historic borrowing track records and avoids taking on the additional debt you would incur with a bank loan

Question 2

What is the difference between Invoice Factoring and Invoice Discounting?

Accepted Answer

Invoice Factoring and Invoice Discounting are the two main types of Invoice Finance.

With Invoice Factoring our dedicated credit control team collect outstanding invoices on your behalf, freeing up valuable time to concentrate on running your business
With Invoice Discounting you maintain responsibility for collecting outstanding invoices and the management of your customer relationships.

Question 3

Is Invoice Factoring right for my business?

Accepted Answer

Invoice Factoring can provide flexible funding that smooths cashflow and grows in line with your sales, without taking on the additional debt you would with a traditional bank loan.

Invoice Factoring is a strong fit if:

You trade primarily business-to-business (B2B)
You offer credit terms to customers
You need support with cashflow fluctuations
You are growing quickly and need working capital
You struggle to secure traditional bank lending due to limited credit history.

It may be less suitable if:

You sell mainly to consumers
Your invoices are very small and low volume
Your margins are extremely tight

If you would rather focus your team on moving your business forward - not on collecting payments - Invoice Factoring could be the right solution.

Unlike traditional finance options such as business loans, Invoice Factoring is based on money you’ve already earned. There’s no additional borrowing, no fixed repayments, and funding grows in line with your sales.

Question 4

What are the key benefits of Invoice Factoring?

Accepted Answer

Invoice Factoring can bring many business benefits, including:

Faster access to cash tied up in invoices
Improved and more predictable cashflow
Reduced time spent chasing customer payments
Professional credit control support included
Funding that grows as your business grows

Question 5

How do I apply for Invoice Factoring?

Accepted Answer

The first step is simply a conversation. Complete the short contact form and a member of our team will call you back.

Once we have completed an initial suitability assessment you will be allocated a dedicated Business Development Manager who will support you through the application process.

We’ll take the time to understand your business, your growth plans and your current challenges. From there, we can explore whether Invoice Factoring is the right fit and outline your options clearly - with no obligation.

You will typically need to provide basic business information, an aged receivables report, details of your main customers and recent financial accounts (if available).

Our relationship focussed approach means that if Invoice Factoring is right for your business we will get to know your individual needs and tailor the facility to support your goals. Our independence and flexibility mean we will often fund when others won’t.

Question 6

How long does it take to set up Invoice Factoring?

Accepted Answer

Approval can often be obtained within a few days.

Full setup usually takes one to two weeks, depending on complexity. You will have a dedicated Business Development Manager to support you through each step of the onboarding process.

Once live, funding against new invoices is typically available within 24 hours of raising them.

Question 7

How quickly can I access funding with Invoice Factoring?

Accepted Answer

With Bibby Financial Services, you can typically access up to 85% of your invoice value within 24 hours of setting up your facility, releasing your working capital to keep your business moving. The time to set up your facility depends on us working together, we have set up clients in as little as two days and we will work as quickly as we can, guided by your needs.

Question 8

How does Invoice Factoring compare with business overdrafts or loans?

Accepted Answer

Invoice Factoring releases the working capital tied up in your invoices and is utilising money already earned by your business. You will receive a percentage (usually around 85%) of the invoice value upon issuing the invoice and the remainder (minus our agreed fees) upon receipt of customer payment. Invoice Factoring is flexible since it is based on the volume of your invoicing so grows as your business grows. For comparison, the key elements of a business overdaft or loan are:

Overdraft

Fixed lending limit
Fixed term before renegotiating
Higher interest charges if you exceed agrees limits

Loan

Fixed lending over a fixed term
Regular fixed payments
Affordability checks against lending criteria

Question 9

How much funding can I unlock?

Accepted Answer

Funding from us grows in line with your business. So the more you invoice, the more working capital you can access. This makes Invoice Factoring a flexible solution that scales with your business. You can typically access up to 85% of your invoice value. The amount you can access is dependent on your sector, debtors and other factors so it is always best to speak to one of our team so that we can provide a more personalised quote.

Question 10

What happens if my customer doesn’t pay?

Accepted Answer

Our Q1 survey of 1000 SMEs revealed 30% had experienced bad debt in the previous year, an increase since our last survey.

Many businesses that use Invoice Factoring also choose Bad Debt Protection to make sure that they still receive payment if their customers can’t settle their invoices. This will safeguard your business against non-payment should your customers be unable to pay their invoice.

You can learn more about Bad Debt Protection by visiting this page What is Bad Debt Protection for Invoice Finance?

Question 11

How does Invoice Factoring work if I have customers overseas?

Accepted Answer

Depending on how much you trade overseas, our specialist Export Finance solution could be more suitable. Designed specifically for exporters, it can bridge the gap between raising an invoice and getting paid and help you better manage relationships with overseas customers.

Our Foreign Exchange services can also help you trade more effectively and reduce exposure to currency fluctuations.

Question 12

Will my customers know I’m using Invoice Factoring?

Accepted Answer

This depends on which Invoice Factoring solution you choose. With Confidential Invoice Factoring, your customers won’t know. With a disclosed Invoice Factoring facility, your customers will know you have chosen to fund your business with Invoice Factoring. With either facility, Bibby Financial Services will handle collections professionally on your behalf so you can free up time to focus on your business.

Question 13

Can Invoice Factoring help my business grow?

Accepted Answer

Absolutely yes - by improving cashflow, you can confidently take on larger contracts, hire staff, invest in stock, and expand operations without worrying about delayed payments. Many SMEs use Invoice Factoring specifically to unlock growth opportunities.

You can see how Invoice Finance has helped Fort Builders' Merchants to improve cashflow, build working capital and invest to secure their future.

Invoice Factoring

What is Invoice Factoring?

How does Invoice Factoring work?

Invoice Factoring saves time chasing payments

Speak with one of our team today