Single invoice finance
A common challenge of being a small business owner is ensuring that you have access to cash when you need it. However, when clients have extended credit terms, it may be just one large unpaid invoice that puts you in the red. In the past, slow paying customers were often seen as being at high risk of non-payment. But these days, large customers choosing to delay the payment of invoices is a clever business strategy to improve their own cash situation.
A key advantage of single invoice finance is that you have complete control over which client or supplier invoice you borrow against and your client will not know that you have drawn funds against them.
Rather than borrowing against the value of many or all unpaid invoices, you can strategically choose which invoice to borrow against – for instance, a client whom you have a good rapport with and who will pay in full in time.
What is single invoice finance?
Single invoice or selective invoice financing is a short term finance product that allows a business to unlock cash tied up in one large unpaid invoice to improve cash flow, pay employees and suppliers and reinvest in operations. Because you’re borrowing against money already owed to your business, you won’t need to use real estate as security.
For example, think of one of your large clients that has a large unpaid invoice. You know that because of their debtor history, your relationship with them, and their size, trading history and credibility, that they will repay their debt in full eventually. Rather than wait weeks or months to receive the cash, you can utilise short term finance against the invoice straight away.
How do invoice finance and single invoice finance differ?
While the terms differ slightly, invoice finance can also be known as invoice discounting, receivables finance, debtor finance and factoring. Single invoice finance or selective invoice finance is a subset of invoice finance.
Invoice financing is a form of short term finance that allows a business to unlock working capital tied up in all or part of its unpaid invoices ledger to improve cash flow.
Your business issues invoices to its customers and those that remain unpaid may be considered as eligible invoices. Invoice financing allows you to draw up to 80% of the cash tied up in these assets without having to wait for clients to pay.
Single invoice finance allows your business to draw finance on a single invoice instead of many. The amount of funding you can access varies from client to client. However, typically, in single invoice financing, we provide up to 80% of the total value of the eligible unpaid invoices.
How single invoice finance works
Skippr’s flexible invoice finance lets you draw down funds from one or more invoices from a single or multiple customers. Many businesses like this single invoice or single customer approach and stick with it while others find it convenient to add more invoices and customers to get access to a great amount of funding.
At Skippr we are fully flexible and will work with the needs of your business.
- Skippr Invoice Finance can provide up to $500,000 in invoice finance to a business. This amount is determined by the total value of account receivable (the amount owed to your company for products or services provided on credit) that is outstanding and approved by Skippr.
- Accounts receivable are deemed approved by Skippr Invoice Finance if the debtor is deemed as creditworthy and we are satisfied the invoice will be paid on the agreed terms. Once you’re approved, you may view how much funding you can access in your account.
- There are many benefits to single invoice financing with Skippr Invoice Finance. We are friendly and personal, and it’s a great way to access a line of credit in the short term. Once approved for a business loan, you will have likely to cash within 24 hours – 48 hours. Cloud accounting connection makes reconciliation a breeze. No manually uploading of invoices etc.
How to apply
Applying for single invoice finance is a quick and easy online process that won’t take weeks for approval.
To qualify for a business loan from Skippr Invoice Finance, your business needs to demonstrate the following:
Your business has an outstanding unpaid invoice with another business.
You trade with creditworthy business customers.
Your business is not heavily indebted to other lenders.
The first step is to create an account with Skippr Invoice Finance at skippr.com.au and connect your accounting software.
In less than 24 hours we will be back in touch with either an offer or some additional questions.
If you have any concerns or questions throughout the process, please don’t hesitate to get in touch with a friendly member of our team.
How does Skippr Invoice Financing work?
To start, you connect your accounting software and answer a couple of questions relating to your needs. Using this information we are able to review your business and the customers you work with and provide a no-obligation offer.
An offer confirms how much funding we can provide you based on the amount of eligible outstanding invoices, how much it will cost you and the security required to be held by Skippr Invoice Finance.
Once our team has onboarded you, you are ready to draw funding. You can view the available funding live on the Skippr Invoice dashboard and request funding in a couple of clicks. We process funding requests immediately and expect to receive your funding in less than 24 hours.
When any customers pay their invoices, they pay into a collections account we have opened in your businesses name. These payments automatically repay the loan balance and interest accrued is calculated and charged.
Important to note – all drawdowns and repayments are automatically reflected in your accounting software, saving your Bookkeeper hours of reconciliation work.
How is Skippr Invoice Finance different from other lenders?
At Skippr Invoice Finance we pride ourselves on being fair and flexible
Invoice finance is traditionally a clunky and burdensome financial product for a business. We make it easy with:
- Simple and transparent pricing: we charge only two fees and instead of accruing fees against the total value of your receivables, we only charge fees against what you draw.
- Flexible: Pay only for finance when you need it. No minimum monthly fees. No lock-in contract.
- Seamless and smart: Draw finance and reconcile seamlessly online. We push back all finance data straight into your accounting package. No uploading of documents and no manual bookkeeping.
- Free cash flow management: Manage your collections and forecast cash flow for free with Skippr. Always know why you need finance before you actually need it!
- Exceptional customer service: Dedicated and friendly Account Manager to assist with all things financial.
Why do businesses use single invoice financing?
Single Invoice financing helps a business accelerate growth. Rather than continually chasing up and waiting for a slow debtor to pay, which can be a time consuming and tedious job, businesses can use single invoice finance to release cash flow from their debtor ledger immediately. These funds can then be used as you feel fit to run and grow the business.
Is my business eligible for invoice finance?
While invoice finance (also commonly known as debtor finance) does not have the same strict lending requirements of most business loans issued by banks and other lenders, your business needs to meet certain criteria to be eligible for invoice or single invoice financing.
For example, your business must be well managed, have sufficient commercial credit, and your invoices should not be used as collateral elsewhere. The client invoices you are drawing against must also be legitimate businesses that are creditworthy. You must also prove the invoices are deemed fully earned for products and services and there are no payment disputes.