With Invoice Finance from alternative lenders in Ireland, your invoice is the collateral. The creditworthiness of your customers is key. An overdraft may require a charge over property or equipment.
Ease of organising
Alternative lenders in Ireland are accessible to even the newest businesses with limited credit history. What’s important when it comes to Invoice Finance is the creditworthiness of your customers and your experience in the industry. Overdrafts can be trickier, even if you have property as collateral. Overdraft providers will generally want to see a good credit history.
Financing more invoices means your access to cash grows exponentially. Once you’ve reached a limit on your overdraft, you have to pay it off or renegotiate. Many banks have strict lending criteria based around credit scores. If you have a bankruptcy in your background, it’s highly likely you’ll be turned down. With Invoice Finance, you may be considered because the organisations take much more into account.
Overdraft facilities may cost less than invoice finance services on the surface. Overdraft interest is charged at the agreed rate. However, if the overdraft amount exceeds the agreed terms, then charges will be higher and potentially the overdraft will be withdrawn.
Whatever option you choose, invoice finance or business overdraft, ensure you read the small print and understand the process. Generally the process to arrange an invoice finance agreement is faster than arranging an overdraft. Also, ask what other services your financial services provider can offer to help your business expand.