Question 1

What is Invoice Factoring?

Accepted Answer

Invoice Factoring is a way for businesses to unlock funds tied up in unpaid customer invoices.

Instead of waiting 30, 60 or even 90 days to be paid, you receive around 90% of the invoice value within 24 hours of raising them, allowing you to use the money more immediately for your business needs and improving your cashflow.

Invoice Factoring bridges the gap between raising invoices and being paid. For many SMEs, it’s a way to fund growth without relying on historic borrowing track records and avoids taking on the additional debt you would incur with a bank loan.

Question 2

What is the difference between Invoice Factoring and Invoice Discounting?

Accepted Answer

Invoice Factoring and Invoice Discounting are the two main types of Invoice Finance.

• With Invoice Factoring our dedicated credit control team can support businesses to collect outstanding invoices on your behalf, freeing up valuable time to concentrate on running your business.

• With Invoice Discounting you maintain responsibility for collecting outstanding invoices and the management of your customer relationships.

Question 3

Is Invoice Factoring right for my business?

Accepted Answer

Invoice Factoring can provide flexible working capital that grows alongside your sales, helping you manage cashflow and invest in future growth without taking on additional term debt e.g. business loan.

It can be a particularly strong fit for businesses if:

• You trade business-to-business (B2B)

• You offer credit terms to customers

• You need faster access to working capital

• You are growing and need funding to support larger contracts, increased stock or recruitment

• You want to reduce the impact of late payments on cashflow

• You have found traditional funding difficult to access due to limited trading history or lending criteria

It may be less suitable if:

• You sell mainly to consumers

• Your invoices are very small and low volume

• Your margins are extremely tight

Unlike traditional finance options such as business loans, Invoice Factoring is based on money you’ve already earned but not received. There’s no additional borrowing, no fixed repayments, and funding grows in line with your sales.

Question 4

What are the key benefits of Invoice Factoring?

Accepted Answer

Invoice Factoring can bring many business benefits, including:

• Faster access to cash tied up in invoices

• Improved and more predictable cashflow

• Access to flexible funding that grows in line with your revenue / sales growth

• Reduced time spent chasing customer payments

• Access to experienced credit control support which can help free up time to focus on customers, growth and day-to-day operations

• Funding that grows as your business grows

• Support investment in stock, people, equipment and expansion opportunities

Question 5

How do I apply for Invoice Factoring?

Accepted Answer

The first step is simply a conversation. Complete the short contact form and a member of our team will call you back.

Once we have completed an initial suitability assessment you will be allocated a dedicated Business Development Manager who will support you through the application process.

We’ll take the time to understand your business, your growth plans and your current opportunities and challenges. From there, we can explore whether Invoice Factoring is the right fit and outline your options clearly - with no obligation.

You will typically need to provide basic business information, an aged receivables (debtors) report, details of your main customers and recent financial accounts (if available).

Question 6

How long does it take to set up Invoice Factoring?

Accepted Answer

Approval of a facility and funding limit can often be obtained within a few days, upon receipt of documentation required.

Full setup usually takes one to two weeks, depending on complexity. You will have a dedicated Business Development Manager to support you through each step of the onboarding process.

Once live, funding against new invoices is typically available within 24 hours of raising them.

Question 7

How quickly can I access funding with Invoice Factoring?

Accepted Answer

With Bibby Financial Services, you can typically access up to 90% of your invoice value within 24 hours of setting up your facility, releasing your working capital to keep your business moving.

The time to set up your facility depends on us working together, we have set up clients in as little as two days and we will work as quickly as we can, guided by your needs.

Question 8

How does Invoice Factoring compare with business overdrafts or loans?

Accepted Answer

Invoice Factoring releases the working capital tied up in your invoices and is utilising money already earned by your business. You will receive a percentage (up to usually around 90%) of the invoice value upon issuing the invoice and the remainder (minus our agreed fees) upon receipt of customer payment. Invoice Factoring is revolving credit facility flexible since it is based on the volume of your invoicing and in turns so grows as your business grows. For comparison, the key elements of a business overdraft or loan are:

Overdraft

• Fixed lending limit

• Fixed term before renegotiating

• Higher interest charges if you exceed agrees limits

Loan

• Fixed lending over a fixed term

• Regular fixed payments

• Affordability checks against lending criteria

Question 9

How much funding can I unlock via my sales ledger?

Accepted Answer

Funding from us grows in line with your business. So the more you invoice, the more working capital you can access via your sales ledger. This makes Invoice Factoring a flexible solution that scales with your business. You can typically access up to 90% of your invoice value. The amount you can access is dependent on your sector, debtors and other factors so it is always best to speak to one of our team so that we can provide a more personalised quote.

Question 10

What happens if my customer doesn’t pay?

Accepted Answer

Our latest SME Confidence Tracker found that 40% of Irish SMEs had experienced bad debt in the previous 12 months, highlighting the ongoing impact customer non-payment can have on business cashflow and profitability.

Many businesses that use Invoice Factoring can choose Bad Debt Protection to make sure that they still receive payment even if their customers can’t settle their invoices. This will safeguard your business against non-payment should your customers be unable to pay their invoice.

Question 11

How does Invoice Factoring work if I have customers overseas?

Accepted Answer

Depending on how much you trade overseas, our specialist Export Finance solution could be more suitable. Designed specifically for exporters, it can bridge the gap between raising an invoice and getting paid and help you better manage relationships with overseas customers.

Question 12

Will my customers know I’m using Invoice Factoring?

Accepted Answer

This depends on which Invoice Factoring solution you choose. With Confidential Invoice Factoring, your customers won’t know. With a disclosed Invoice Factoring facility, your customers will know you have chosen to fund your business with Invoice Factoring. With either facility, Bibby Financial Services will handle collections professionally on your behalf so you can free up time to focus on your business.

Question 13

Can Invoice Factoring help my business grow?

Accepted Answer

By releasing cash tied up in unpaid invoices, businesses can invest in stock, recruit staff, take on larger contracts, expand into new markets or manage periods of rapid growth without waiting for customers to pay.

Because funding is linked to the value of invoices raised, available funding can increase as sales grow, making Invoice Factoring a flexible solution for growing businesses.

Businesses that may not meet traditional lending criteria due to limited trading history or a lack of tangible security can also find Invoice Factoring an attractive source of working capital.

Question 14

Can Invoice Factoring help businesses that are growing quickly?

Accepted Answer

Businesses experiencing rapid growth often face pressure on working capital as costs need to be paid before customer invoices are settled.

Invoice Factoring helps bridge this gap by releasing funds from invoices as they are raised, helping businesses access working capital to support recruitment, new contracts, stock purchases and expansion plans.

As Invoice Factoring funding is linked to sales, facilities can grow alongside the business, providing greater flexibility than many traditional forms of finance.

Invoice Factoring

What is Invoice Factoring?