{"id":2820,"date":"2020-03-23T17:20:52","date_gmt":"2020-03-23T17:20:52","guid":{"rendered":"http:\/\/localhost\/2020\/swoopMW20\/?post_type=knowledge-hub&#038;p=2820"},"modified":"2025-08-18T08:59:47","modified_gmt":"2025-08-18T08:59:47","slug":"invoice-finance","status":"publish","type":"knowledge-hub","link":"https:\/\/swoopfunding.com\/na\/knowledge-hub\/invoice-finance\/","title":{"rendered":"Invoice finance"},"content":{"rendered":"<div class=\"aivoov-player-block\">\n\t<div class=\"read_this\">Read this article to me<\/div>\n\t\t\t<style>\n\t\t\t.plyr__controls .plyr__controls__item:first-child{\n\t\t\t\tbackground:#2e9c8e !important;\n\t\t\t}\n\t\t\t:root{\n\t\t\t--plyr-color-main:#2e9c8e;\n\t\t\t--plyr-audio-controls-background:#f0f2f4;\n\t\t\t--plyr-audio-control-color:#546a7b;\n\t\t\t}\n\t\t\t[data-plyr=\"mute\"]{color:#2e9c8e !important}\n\t\t\t.aivoov-text-color{color:#546a7b}\n\t\t<\/style> \n\t\t<div class=\"audio_player\">\n\t\t<audio class=\"js-player\" controls=\"\">\n\t\t\t<source src=\"https:\/\/monky-voice-over.s3.amazonaws.com\/aivoov\/781640cc-7bc1-4bbf-9492-22dedc19678b\/95d35bb4-a37b-47ae-81de-024c985d8482.mp3\" type=\"audio\/mp3\">\n\t\t\t<source src=\"https:\/\/monky-voice-over.s3.amazonaws.com\/aivoov\/781640cc-7bc1-4bbf-9492-22dedc19678b\/95d35bb4-a37b-47ae-81de-024c985d8482.mp3\" type=\"audio\/ogg\" \/>\n\t\t<\/audio> \n\t\t\t\t <div class=\"powerd_by aivoov-text-color\"><p><a rel=\"nofollow noopener\" target=\"_blank\" href=\"http:\/\/aivoov.com\/?um_source=plugin_powered_by\" style=\"color: inherit;\">Powered by AiVOOV<\/a><\/p><\/div>\n\t\t \n\t\t<\/div>\n\t\t<\/div>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n <div class=\"faq-accordion faq-accordion863\">\n <div class=\"card\">\n <div class=\"card-header\" id=\"heading0863\">\n <h5 class=\"mb-0\">\n <a class=\"btn btn-link\" data-toggle=\"collapse\" data-target=\"#collapse0863\" aria-expanded=\"true\" aria-controls=\"collapse0\">\n What is invoice finance? <\/a>\n <\/h5>\n <\/div>\n\n <div id=\"collapse0863\" class=\"collapse show\" aria-labelledby=\"heading0\" data-parent=\".faq-accordion863\">\n <div class=\"card-body\">\n <p>Invoice finance allows your company to borrow money against outstanding invoices. It works like a traditional loan, but you use your accounts receivable as collateral rather than physical assets such as your premises.<\/p>\n<p>Invoice finance lets you borrow up to 95% of the value of your unpaid invoices, to a maximum of N$10 million. The lender charges you a percentage of the amount of the invoice, based on the kind of product or service you sell and the payment terms you agree with your customers, plus a set-up fee. This type of finance is typically suitable for a company with a minimum revenue of N$500,000.<\/p>\n<p>Invoice finance is a way of borrowing money using your unpaid invoices. If you\u2019ve issued invoices to your customers and these haven\u2019t yet been paid, invoice finance unlocks this money early. It\u2019s like a <a href=\"https:\/\/swoopfunding.com\/na\/business-loans\/\">business loan<\/a>, but instead of using a physical asset like a building as security, invoice finance uses your accounts receivable.<\/p>\n<p>Invoice finance is a type of <a href=\"https:\/\/swoopfunding.com\/na\/knowledge-hub\/asset-finance\/\">asset finance<\/a> that enables you to borrow money based on what your customers owe to your business (accounts receivable).<\/p>\n <\/div>\n <\/div>\n <\/div>\n <div class=\"card\">\n <div class=\"card-header\" id=\"heading1863\">\n <h5 class=\"mb-0\">\n <a class=\"btn btn-link\" data-toggle=\"collapse\" data-target=\"#collapse1863\" aria-expanded=\"true\" aria-controls=\"collapse1\">\n Why choose invoice finance? <\/a>\n <\/h5>\n <\/div>\n\n <div id=\"collapse1863\" class=\"collapse \" aria-labelledby=\"heading1\" data-parent=\".faq-accordion863\">\n <div class=\"card-body\">\n <p>Unpaid invoices of course represent money that will be paid to you. You might offer your customers payment terms of 30, 60, 90 or even 120 days. Assuming your customers pay on time, the value of your sales is still locked in for those 30, 60, 90 or 120 days.<\/p>\n<p>When you issue an invoice, depending on your terms (or the terms imposed by your customer), you may have to wait for as long as 120 days for the payment to arrive in your bank account. Even though you have fulfilled your side of the transaction, you can\u2019t access the value, which can seriously hinder your cash flow.<\/p>\n<p>Invoice finance helps your company avoid this problem by unlocking that value, sometimes within 24 hours. A lender advances you the money so you can put it straight to work in your business or use it to pay bills or salaries.<\/p>\n<p>There are three main different types of invoice finance:<\/p>\n<ul>\n<li><a href=\"https:\/\/swoopfunding.com\/na\/knowledge-hub\/invoice-discounting\/\">invoice discounting<\/a>, including <a href=\"https:\/\/swoopfunding.com\/na\/knowledge-hub\/selective-invoice-discounting\/\">selective invoice discounting<\/a><\/li>\n<li><a href=\"https:\/\/swoopfunding.com\/na\/knowledge-hub\/invoice-factoring\/\">invoice factoring<\/a>, including <a href=\"https:\/\/swoopfunding.com\/na\/knowledge-hub\/spot-factoring\/\">spot factoring<\/a><\/li>\n<li><a href=\"https:\/\/swoopfunding.com\/na\/knowledge-hub\/chocs-customer-handles-own-collections\/\">CHOCS<\/a> (a hybrid of invoice discounting and factoring, also known as CHOCC)<\/li>\n<\/ul>\n <\/div>\n <\/div>\n <\/div>\n <div class=\"card\">\n <div class=\"card-header\" id=\"heading2863\">\n <h5 class=\"mb-0\">\n <a class=\"btn btn-link\" data-toggle=\"collapse\" data-target=\"#collapse2863\" aria-expanded=\"true\" aria-controls=\"collapse2\">\n Is it suitable for an SME? <\/a>\n <\/h5>\n <\/div>\n\n <div id=\"collapse2863\" class=\"collapse \" aria-labelledby=\"heading2\" data-parent=\".faq-accordion863\">\n <div class=\"card-body\">\n <p>Because invoice discounting is a riskier prospect for your finance provider (compared to factoring), you might find it hard to obtain if you are an early-stage business. To qualify for invoice discounting you need to reassure your finance provider that they\u2019ll be repaid by your customers after advancing money to you. So you will need:<\/p>\n<ul>\n<li>an established method of credit collection<\/li>\n<li>a track record that proves that your clients pay on time<\/li>\n<\/ul>\n<p>Invoice discounting and invoice factoring are generally more widely available to established businesses rather than startups \u2013 you need to have a reliable revenue.<\/p>\n <\/div>\n <\/div>\n <\/div>\n <div class=\"card\">\n <div class=\"card-header\" id=\"heading3863\">\n <h5 class=\"mb-0\">\n <a class=\"btn btn-link\" data-toggle=\"collapse\" data-target=\"#collapse3863\" aria-expanded=\"true\" aria-controls=\"collapse3\">\n Have you also considered? <\/a>\n <\/h5>\n <\/div>\n\n <div id=\"collapse3863\" class=\"collapse \" aria-labelledby=\"heading3\" data-parent=\".faq-accordion863\">\n <div class=\"card-body\">\n <p><strong>Invoice discounting<\/strong><\/p>\n<p><a href=\"https:\/\/swoopfunding.com\/na\/knowledge-hub\/invoice-discounting\/\">Invoice discounting<\/a> is the simplest type of invoice finance. It involves a lender advancing you money against unpaid invoices and charging a fee based on the value. This form of finance is suitable for bigger companies with a relatively high revenue as it allows them to secure funding against their entire sales ledger.<br \/>\nInvoice discounting is confidential, so your customers don\u2019t know you\u2019re using their invoice as collateral. Your company remains in charge of its own credit collection. It\u2019s also considered riskier so your lender may require evidence that your customers pay promptly and you have in-house capacity to chase outstanding payments.<\/p>\n<p><strong>Spot factoring<\/strong><\/p>\n<p><a href=\"https:\/\/swoopfunding.com\/na\/knowledge-hub\/spot-factoring\/\">Spot factoring<\/a> allows you to borrow money against specific unpaid invoices rather than your sales ledger, so it\u2019s also suitable for companies with at least a few large customers. The main difference with selective invoice discounting is that spot factoring is disclosed. You hand over control of the invoices you choose to finance to the lender who collects payment from your customer and forwards your company the balance less its fee. Spot factoring may suit SMEs that don\u2019t have the resources to chase outstanding payments and are happy to let a lender take the responsibility on their behalf.<\/p>\n<p><strong>Confidential invoice finance<\/strong><\/p>\n<p><a href=\"https:\/\/swoopfunding.com\/na\/knowledge-hub\/confidential-invoice-finance\/\">Confidential invoice finance<\/a> is a suitable funding option if you prefer your customers to remain unaware that you\u2019re securing finance against their invoices.<br \/>\nConfidential invoice finance refers to forms of invoice finance that aren\u2019t disclosed to your customers. We\u2019ve already described invoice discounting, but confidential invoice factoring and CHOCs (Customer Handles Own Collections) are other examples of this type of finance.<\/p>\n<p><strong>CHOCs (Customer Handles Own Collections)<\/strong><\/p>\n<p><a href=\"https:\/\/swoopfunding.com\/na\/knowledge-hub\/chocs-customer-handles-own-collections\/\">CHOCs, short for Customer Handles Own Collections<\/a>, is a cross between invoice discounting and invoice factoring. As with invoice discounting, you deal directly with your own customers. However, like invoice factoring, your customers pay the lender instead of your company, so they know you\u2019re using their invoices to secure working capital.<br \/>\nCHOCs are suitable if you\u2019d like to maintain a direct relationship with your client or for early-stage companies that don\u2019t qualify for invoice discounting, as long as they can prove they have the in-house capacity to chase outstanding payments. They can also offer a more cost-effective option for companies with lots of small customers.<\/p>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n \n <script type=\"application\/ld+json\">\n    {\n        \"@context\": \"https:\/\/schema.org\",\n        \"@type\": \"FAQPage\",\n        \"mainEntity\": [\n                                {\n                \"@type\": \"Question\",\n                \"name\": \"What is invoice finance?\",\n                \"acceptedAnswer\": {\n                    \"@type\": \"Answer\",\n                    \"text\": \"Invoice finance allows your company to borrow money against outstanding invoices. It works like a traditional loan, but you use your accounts receivable as collateral rather than physical assets such as your premises. Invoice finance lets you borrow up to 95% of the value of your unpaid invoices, to a maximum of N$10 million. The lender charges you a percentage of the amount of the invoice, based on the kind of product or service you sell and the payment terms you agree with your customers, plus a set-up fee. This type of finance is typically suitable for a company with a minimum revenue of N$500,000. Invoice finance is a way of borrowing money using your unpaid invoices. If you\u2019ve issued invoices to your customers and these haven\u2019t yet been paid, invoice finance unlocks this money early. It\u2019s like a business loan, but instead of using a physical asset like a building as security, invoice finance uses your accounts receivable. Invoice finance is a type of asset finance that enables you to borrow money based on what your customers owe to your business (accounts receivable).\"\n                }\n            },                                {\n                \"@type\": \"Question\",\n                \"name\": \"Why choose invoice finance?\",\n                \"acceptedAnswer\": {\n                    \"@type\": \"Answer\",\n                    \"text\": \"Unpaid invoices of course represent money that will be paid to you. You might offer your customers payment terms of 30, 60, 90 or even 120 days. Assuming your customers pay on time, the value of your sales is still locked in for those 30, 60, 90 or 120 days. When you issue an invoice, depending on your terms (or the terms imposed by your customer), you may have to wait for as long as 120 days for the payment to arrive in your bank account. Even though you have fulfilled your side of the transaction, you can\u2019t access the value, which can seriously hinder your cash flow. Invoice finance helps your company avoid this problem by unlocking that value, sometimes within 24 hours. A lender advances you the money so you can put it straight to work in your business or use it to pay bills or salaries. There are three main different types of invoice finance:  invoice discounting, including selective invoice discounting invoice factoring, including spot factoring CHOCS (a hybrid of invoice discounting and factoring, also known as CHOCC) \"\n                }\n            },                                {\n                \"@type\": \"Question\",\n                \"name\": \"Is it suitable for an SME?\",\n                \"acceptedAnswer\": {\n                    \"@type\": \"Answer\",\n                    \"text\": \"Because invoice discounting is a riskier prospect for your finance provider (compared to factoring), you might find it hard to obtain if you are an early-stage business. To qualify for invoice discounting you need to reassure your finance provider that they\u2019ll be repaid by your customers after advancing money to you. So you will need:  an established method of credit collection a track record that proves that your clients pay on time  Invoice discounting and invoice factoring are generally more widely available to established businesses rather than startups \u2013 you need to have a reliable revenue.\"\n                }\n            },                                {\n                \"@type\": \"Question\",\n                \"name\": \"Have you also considered?\",\n                \"acceptedAnswer\": {\n                    \"@type\": \"Answer\",\n                    \"text\": \"Invoice discounting Invoice discounting is the simplest type of invoice finance. It involves a lender advancing you money against unpaid invoices and charging a fee based on the value. This form of finance is suitable for bigger companies with a relatively high revenue as it allows them to secure funding against their entire sales ledger. Invoice discounting is confidential, so your customers don\u2019t know you\u2019re using their invoice as collateral. Your company remains in charge of its own credit collection. It\u2019s also considered riskier so your lender may require evidence that your customers pay promptly and you have in-house capacity to chase outstanding payments. Spot factoring Spot factoring allows you to borrow money against specific unpaid invoices rather than your sales ledger, so it\u2019s also suitable for companies with at least a few large customers. The main difference with selective invoice discounting is that spot factoring is disclosed. You hand over control of the invoices you choose to finance to the lender who collects payment from your customer and forwards your company the balance less its fee. Spot factoring may suit SMEs that don\u2019t have the resources to chase outstanding payments and are happy to let a lender take the responsibility on their behalf. Confidential invoice finance Confidential invoice finance is a suitable funding option if you prefer your customers to remain unaware that you\u2019re securing finance against their invoices. Confidential invoice finance refers to forms of invoice finance that aren\u2019t disclosed to your customers. We\u2019ve already described invoice discounting, but confidential invoice factoring and CHOCs (Customer Handles Own Collections) are other examples of this type of finance. CHOCs (Customer Handles Own Collections) CHOCs, short for Customer Handles Own Collections, is a cross between invoice discounting and invoice factoring. As with invoice discounting, you deal directly with your own customers. However, like invoice factoring, your customers pay the lender instead of your company, so they know you\u2019re using their invoices to secure working capital. 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They can also offer a more cost-effective option for companies with lots of small customers.\"\n                }\n            }          ]\n    }\n    <\/script>\n \n","protected":false},"excerpt":{"rendered":"","protected":false},"author":39,"menu_order":14,"template":"","segment":[298,302],"class_list":["post-2820","knowledge-hub","type-knowledge-hub","status-publish","hentry","segment-invoice-finance","segment-types-of-finance"],"acf":[],"featured_image_urls_v2":{"full":"","thumbnail":"","medium":"","medium_large":"","large":"","1536x1536":"","2048x2048":"","image_blog":"","image_blog_full":"","image_podcast":"","image_banking":"","image_blog_internal":"","image_blog_medium":"","image_single_banking":""},"post_excerpt_stackable_v2":"<p>Read this article to me Powered by AiVOOV What is invoice finance? Invoice finance allows your company to borrow money against outstanding invoices. It works like a traditional loan, but you use your accounts receivable as collateral rather than physical assets such as your premises. Invoice finance lets you borrow up to 95% of the value of your unpaid invoices, to a maximum of N$10 million. The lender charges you a percentage of the amount of the invoice, based on the kind of product or service you sell and the payment terms you agree with your customers, plus a set-up&hellip;<\/p>\n","category_list_v2":"","author_info_v2":{"name":"Alexandre Colucci","url":"https:\/\/swoopfunding.com\/na\/author\/alexcolucci\/"},"comments_num_v2":"0 comments","_links":{"self":[{"href":"https:\/\/swoopfunding.com\/na\/wp-json\/wp\/v2\/knowledge-hub\/2820","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/swoopfunding.com\/na\/wp-json\/wp\/v2\/knowledge-hub"}],"about":[{"href":"https:\/\/swoopfunding.com\/na\/wp-json\/wp\/v2\/types\/knowledge-hub"}],"author":[{"embeddable":true,"href":"https:\/\/swoopfunding.com\/na\/wp-json\/wp\/v2\/users\/39"}],"version-history":[{"count":1,"href":"https:\/\/swoopfunding.com\/na\/wp-json\/wp\/v2\/knowledge-hub\/2820\/revisions"}],"predecessor-version":[{"id":44537,"href":"https:\/\/swoopfunding.com\/na\/wp-json\/wp\/v2\/knowledge-hub\/2820\/revisions\/44537"}],"wp:attachment":[{"href":"https:\/\/swoopfunding.com\/na\/wp-json\/wp\/v2\/media?parent=2820"}],"wp:term":[{"taxonomy":"segment","embeddable":true,"href":"https:\/\/swoopfunding.com\/na\/wp-json\/wp\/v2\/segment?post=2820"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}