- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 10 Dec 2019
One of the key issues facing contractors and sub-contractors in the construction industry has always been that of late payment. Invoice finance is a product (or group of products) aimed at improving cash-flow for businesses who issue 30/60/90-day invoices to other businesses.
How it works:
- Once a facility is in place, the standard invoice is sent to the customer as usual.
- A copy of the invoice is sent to the finance provider who will pay a pre-arranged percentage of the invoice amount within 24 hours. The amount paid is usually between 80% and 100% of the invoice total.
- The invoice finance company will chase the customer for payment and when paid, the balance (less any fees) is sent on to the seller.
The standard process is 'factoring' - where the customer is made aware that the finance company is chasing for payment. In confidential invoice discounting, the customer is unaware that the finance company is chasing for payment.
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