How much does invoice finance cost?

There are two elements to costs. The first is an admin fee to process all invoices you send for finance. This cost depends on a number of factors such as number of invoices produced in the month, number of customers, number of credits produced.
So if you have monthly sales of 20,000 pounds made up of approx 10 invoices of about two thousand pounds each to ten customers then the time spent controlling and collecting the debts is going to be a lot less than if the same 20,000 pounds of sales was made up of 10,000 invoices of two pounds each over 5,000 customers.
So there is a trade-off between workload and cost – and maybe by changing the way of working can reduce admin costs and therefore invoice finance costs.
Typically, admin costs for invoice finance range from 0.5% to 2.5% of invoice value depending on the volume of work involved.

The cost of borrowing (the amount you have before the customer pays) is usually very competitive. It is called a discount charge – when in reality it is interest.

This typically is between 2% and 4% above LIBOR rate – and this compares very favourably with traditional bank overdraft rates of between 3% and 9% above LIBOR.

So borrowing can become cheaper, and access to more funds than traditional bank borrowing is a certainty for expanding businesses.

contact me for a free appraisal and I will sweep available funders to give you an honest appraisal of potential costs and benefits.

What can you lose?