Selective invoice financing

Quick facts

Amount

Advance of up to 95% of the value of your invoice (usually a large invoice with a value more than $45,000)

Term

Depends on the product and on your payment terms (e.g. 30, 60, 90 or 120 days)

Cost

A percentage of the invoice value (rate will vary according to the lender, your business profile and the length of the agreement) plus set-up fee – selective invoice finance is usually more expensive on a per invoice basis than whole ledger facilities

Speed

From 24 hours to 2 weeks

Purpose of finance

To finance specific (large) invoices rather than your entire sales ledger (to ease cash flow and to minimise late payment and debt)

Suitable for

A broad range of businesses with B2B invoices (e.g. seasonal businesses, those with occasional large projects and those with just a few debtors) – lenders require a minimum trading history and minimum turnover

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Selective invoice finance allows you to finance specific invoices (or customers). This can be useful if you take large orders from one customer but your other invoices are smaller or irregular. By using selective invoice finance you can get advances for your large invoices, leaving the smaller ones unaffected. There are two main types of selective invoice finance: selective invoice discounting and spot factoring.

If you’re a small business with seasonal fluctuations in cash flow, a factoring facility, which is usually whole revenue (i.e. you have to factor your entire sales ledger), might not be the most cost-efficient way for you to raise working capital. You might instead look at selective invoice finance – where you can choose to finance specific invoices. There are two main types of selective invoice finance: spot factoring and selective invoice discounting.

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