Invoice financing is the process of selling your invoices or receivables to a "factor" for immediate cash. Even new businesses with creditworthy customers can implement invoice financing to maintain cash flow to grow the business with the risk of late or slow payment for clients.

When you choose invoice financing, the financer or factor will fully manage your sales ledger and provides you with credit control and collection services for your outstanding debts. The financer or factor will typically advance 80 to 90% of the invoice amount when you sell an invoice. The balance, less fees, is then paid after the invoice payment is received.

With invoice financing, the service is disclosed to your customer by way of a letter, typically. It will accompany the invoice and include payment instructions for them to follow.

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