Invoice Finance set-up time can depend on a number of important factors: How prepared your business documents are and how quickly your debtors can be assessed.

ScotPac offers Invoice Finance tailored to your business. You can enquire online, and a lending specialist will explain the assessment, documents and facility setup required for your application.

Ultimately, some aspects of how fast your Invoice Finance set-up will be in your control, and some aspects are not. At the end of the day, businesses wanting to know how long it will take are usually concerned with solving their cash flow needs in time, not just curious about the paperwork turnaround times.

If you’re looking for fast, flexible Invoice Finance, find out more about ScotPac’s solutions today.

What determines how fast Invoice Finance is to set up?

Several factors affect setup time, including:

  1. How prepared you are to apply for Invoice Finance; and
  2. How quickly your debtors can be assessed as creditworthy.

What factors can your business control?

Preparing clear records and responding promptly to requests can help the assessment progress. Agreeing facility terms and completing verification may also take time.

Missing or incomplete documents can lead to follow-up requests and delay setup.

Financial statements

Prepare recent financial records, bank statements and invoicing information, and ask ScotPac which documents and periods it needs. ScotPac’s Invoice Finance criteria include at least six months in operation, alongside its invoicing and debtor requirements.

Aged Debtor Ledger

It can help to prepare an aged debtor ledger, also called an aged receivables report. This lists customers, invoice dates and numbers, amounts outstanding, and how long payments have been due. You can contact ScotPac before it is ready; the team will confirm the information required for assessment.

Application preparation

Being prepared for your Invoice Finance application can significantly impact the setup time. Before starting your application, make sure your invoicing system is clear, consistent and easy to read. This will make checking your debtor payment history easier for the lender.

It is also helpful to have established and consistent trade terms with your customers documented and standardised. When terms are ad hoc or unclarified, this can make the process of verifying your sales ledger much harder and more protracted.

Timely responses

Responding to requests for additional information, documentation or clarification in a timely manner will help to make the entire process significantly quicker for everyone.

These preparations can support an efficient assessment, but they do not guarantee a particular turnaround time.

Sometimes there are factors that are not in your control but that can mean the process takes a bit longer.

What factors can’t your business control?

The debtor and credit assessment takes place on the lender’s side. There are factors that shape how long it takes that you cannot change or influence. For example, checks that have to do with your customers and their creditworthiness independent of your documentation. A debtor ledger that’s heavily concentrated on one or two customers only can take longer to assess in some instances.

Internal verification steps, which are needed to ensure everything is checked off before invoices are funded, are the responsibility of the finance provider rather than your business as the applicant.

The checks and requirements depend on the provider, product and application. Ask your ScotPac specialist what remains outstanding and when the next step is expected.

A practical example

An engineering workshop invoices 8 customers, one of which accounts for more than half its ledger. It has clean monthly management accounts, an aged receivables report it can produce the same day it is asked for, and documented 30 day terms with every customer. What it has not done is separate its staged progress claims from its completed invoices, and those are assessed differently. So the parts of the process the business controls are already in good order. The 2 things most likely to add time are the concentration in that ledger, which sits with the assessment rather than with the business, and a question about which of its invoices qualify at all. The second of those is worth raising in the first conversation rather than treating it as paperwork that will clear itself.

What Can Delay Setup or Affect Eligibility?

Issues to address with your provider include:

  • Incomplete or out-of-date financial records
  • Inconsistent financial documentation formats
  • Staged or advance invoices, which may not qualify for standard Invoice Finance
  • Consumer invoices, which do not meet the B2B invoice requirement
  • Slow turnaround on information requests from the applicant
  • Lack of trade term documentation

Some issues involve missing information; others affect whether an invoice or business qualifies at all. Ask ScotPac to assess your invoicing model before assuming that additional processing time will resolve an eligibility issue.

What does Invoice Finance setup look like?

Initial consultation 

Our lending specialist will talk through what your business does, who your customers are, how your invoicing works, and how much of your ledger you want to fund to meet your business goals. This is where our team begins to paint a picture of your business and industry, to tailor an Invoice Finance facility for you.

Document collection and application

ScotPac will confirm the documents and submission method required for your application. Organising your financial records, debtor ledger and trade terms can help you respond promptly to those requests.

Assessment

During the debtor and credit assessment stage our assessors will verify your business’s documentation and your customers’ creditworthiness.

Facility setup

Once the assessment is complete, we work with you to structure your Invoice Finance facility and agree on terms. This is based on your invoicing cycle and trade terms, and the paperwork is drawn up for signing accordingly.

Invoice financed

Once the setup process is complete, you can begin submitting invoices against the new facility for access to advanced working capital.

Invoice Finance setup time can vary from provider to provider and from client to client. To find out more about ScotPac’s application process, eligibility and speed, speak to our team today.

Frequently asked questions

Does Invoice Finance require all your invoices to be funded or specific ones?

This depends on the Invoice Finance facility structure and agreement. Some businesses fund their entire debtor ledger, while others only finance some invoices. Discuss which option is right for you with a ScotPac lending specialist.

Will my customers know I'm using Invoice Finance?

That depends on the type of facility you choose as well. Confidential arrangements exist alongside non-confidential ones, and each option comes with advantages and disadvantages. Our team here at ScotPac can help discuss which option is best for your needs.

What happens if a customer pays their invoice late?

An overdue invoice may affect available funding or require action under your facility agreement. Ask ScotPac how late payments, disputes and customer non-payment are handled, both before applying and if an issue arises.

Do I need property as security to get Invoice Finance?

No, you do not need any property or other asset to use as collateral. Invoice Finance leverages your unpaid invoices as security rather than your personal home.