Selective Invoice Finance

Yes, you can sell single or multiple invoices to a selective invoice factoring company. This flexible solution lets you choose as many or as few invoices as you like. After you’ve sold one invoice, there’s no obligation to sell another; this credit facility puts the control directly into your hands.

Selective invoice finance is a flexible ‘on-demand service’. This means that fees will be considerably higher than if you sold multiple invoices through whole-sales ledger finance facilities like invoice factoring or invoice discounting.

Yes. Selective invoice finance can also be known as spot factoring or single invoice finance. These terms all refer to the same product where you can select one invoice to sell on a 'pay as you go' basis.

You might not want to relinquish credit control to your selective invoice finance company, and that's understandable – you've built personal relationships with your customers, and you want to maintain that.

Although some spot factoring companies will allow you to keep credit control in your hands, some will insist on chasing the end customer for payment.

Selective invoice discounting is a type of selective invoice finance that enables a business to advance customer payments on an invoice-by-invoice basis. However, unlike spot factoring, with selective invoice discounting it remains the business’ responsibility to chase and collect customer payments.

This confidential invoice finance option is better suited to businesses that don’t want to relinquish credit control to the selective invoice finance company.

Selective invoice finance offers businesses several benefits. This type of invoice finance facility is by far the most accessible, enabling companies of all sizes and sectors to advance customer and client payments quickly.

The advantages of selective invoice finance:

• Unlock money tied in unpaid invoices: Once your selective invoice finance facility is set up, your invoice cash advance usually gets released within 24 hours.
• Easier for startups and small businesses to access: No minimum turnover or trading term is required, any B2B business can tap into this selective facility.
• Credit history is not the main determiner in approval: Because you’re advancing money that’s already owed to your business, a poor credit history won’t hold you back.
• No long-term commitment required: Signing up for a lengthy contract might not be the way you want to handle short periods of lower cash flow. With selective invoice finance, you’re under no obligation to continue raising customer invoices.
• Eliminate lengthy invoice payment terms: In the UK, the late payment crisis is responsible for thousands of business closures every year. Selective invoice finance provides an immediate solution.

The disadvantages of selective invoice finance:

• Higher fees and charges: Because of the flexibility this product provides, single invoice finance lenders tend to charge increased fees
• Only offered on commercial invoices: Unfortunately, invoice finance facilities can only be used by B2B businesses
• Lack of in-house credit control: With spot factoring, you relinquish your credit control processes. This has the potential to impact a business’ relationship with its customers

The majority of selective invoice providers will offer Bad Debt Protection (BDP) as standard practice. This protects you and your business against any potential losses caused by a customer not being able to pay.

Without BDP insurance, you’ll likely be liable to pay if you find yourself dealing with a problematic customer, so it’s important to check this with the provider during the application process.

Usually, a selective invoice financing company won’t credit check your business. However, they will run credit checks against your potential customer(s) to identify risk and reduce the chances of overdue or unpaid invoices.

Whenever you seek business finance, you should always compare providers to ensure you’re getting the most competitive deal on the market. This is particularly important for selective invoice financing, a service that tends to come with higher fees and additional charges.

We understand that comparing selective finance providers can take up a considerable amount of time, and for business owners, time is money. When you apply through SME Invoice Finance, there’s no need to research providers - we do the ground work for you to ensure you receive the best rate possible. All you need to do is apply now.