As a readily available and flexible form of business borrowing at a time when bank loans are ever harder to come by, sales ledger financin is growing in popularity.
Late payment by customers who demand 60 or even 90 day invoice terms can create a huge cash flow obstacle for many businesses and tie up large chunks of working capital. By releasing the money that is owed on such invoices, sales ledger finance companies provide a finance option that grows naturally and sustainably with a company’s balance sheet.
Sales ledger financing thus relieves pressure on the company bank account and provides capital for business expansion without the need for bank lending.
Approved Index helps you find the best sales ledger financing options for your business by providing quotes from multiple suppliers at no cost and with no obligations.
What is Sales Ledger Finance?
A company with a sales ledger financing agreement can borrow money against their outstanding invoices.
- You can present an invoice and release up to 90% of its value on the day the invoice is raised
- You don’t need to wait for customer payment to realise your sales revenue
- You receive the remainder (less a fee) upon payment of the invoice
- You can keep your invoice raising and credit control processes in-house or hand them over to the sales ledger finance company
- You can keep the arrangement confidential – your customers need never know about your finance arrangements
- Your ability to borrow grows with your sales ledger
- You can purchase extra protection against bad debts
With those benefits it’s easy to see why sales ledger finance agreements are becoming ever more popular among large and small businesses alike.
Sales Ledger Finance Options
There are two main forms of sales ledger finance agreement which differ greatly. The names are similar but the distinction is very important:
- Invoice financing sees you retain your invoice raising processes and keep credit control in-house. You only present those invoices which you wish to borrow against but the amount you can draw down is often much less than 90%.
- Invoice factoring gives you the option to release up to 90% of your sales ledger balance but also sees you handing over credit control. This can provide an extra saving for companies without the manpower to chase payment but can be a step too far for those who wish to stay in control. Read more about some of the Top UK Factoring Companies.
Compare Sales Ledger Finance Quotes
Approved Index can make the process of comparing the available sales ledger finance options and rates quick and easy.
Just fill in the simple form above to get up to 4 free, no-obligation quotes for your company today.
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