Is it possible to get single invoice finance?

Updated: 13th March 2020

Single invoice finance is a flexible way to ease business cash flow, particularly for organisations that generate large individual invoices and have sporadic rather than long-term funding needs.

Unpaid invoices contain significant value and are commonly used to provide continuous funding and cash flow support via factoring and invoice discounting. As the name suggests, however, single invoice finance is slightly different in that it’s a short-term arrangement.

So how does single invoice finance work, and is it possible to secure it for your business?

How does single invoice finance work?

Lenders that offer single invoice finance advance a proportion of an individual invoice – usually around 80% to 90% of the invoice value – immediately after it’s issued. The remaining amount is released when your customer pays, after the lender has deducted their fees and charges.

You might choose to use this type of facility for invoices you send to customers who always pay late, for example, but you’re able to decide which invoices to submit for lending and also retain full control of your collection procedures.

Single invoice finance can be extremely beneficial for companies that secure large orders, particularly small and medium sized enterprises that work with large corporations or offer long credit terms. It can also help to prevent overtrading, and provides the funding needed to grow.

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Are you eligible for single invoice finance?

Lenders typically take into account the following factors before sanctioning this type of funding:

High profit margins: interest rates associated with single invoice finance are generally high, but if you run a business with higher than average profit margins they can be more readily absorbed.
Good turnover: the lender will look for a healthy annual turnover.
Creditworthiness of your customers: it’s not your own company’s creditworthiness that affects eligibility for single invoice finance, but that of your customers. If they pay their invoices on time and in full on a consistent basis, and also have a good credit record, you may be eligible.
Strong trading history: a well-established commercial presence and strong trading history are key factors.

For more information on single invoice finance, and whether your business might be eligible, please contact our partner-led team at Real Business Rescue for a free same-day consultation. We have contacts with over 50 alternative lenders around the country, and will provide reliable guidance on the best form of finance for your particular business.