Factors That Affect The Invoice Financing Costs

The invoice financing costs are going to vary depending on a number of factors. These are going to include things like your credit rating, business type and how long you’ve been trading for. If you’re new to business or have had any issues with paying your suppliers in the past, then it’s likely that your rate will be higher than someone who has an excellent credit rating and has been trading for many years. 

Another factor that can affect your overall invoice finance costs is whether you decide to use a factoring company or an invoice finance broker. An invoice finance UK company will usually charge more. As they cover all aspects of invoicing such as administration and collection. However, may be able to offer better rates if you have a good credit history. 

An invoice finance broker will often charge lower fees as they don’t provide funding themselves but instead arrange funding from one of their investors. This means there is less work involved for them and so you should expect lower charges. 

There are also different types of invoice finance UK available which could alter your overall costs. For example, a lot of companies offer ‘short-term’ funding where you get access to money within 24 hours or the next working day at most. 

However, these loans tend to come with higher interest rates. As they aren’t secured against assets and so lenders aren’t taking much risk when lending out money.