Invoice Finance

Both are types of Invoice Finance. With Invoice Factoring, ScotPac supports the accounts receivable and collections process. With Invoice Discounting, your business generally keeps control of collections and customer contact. The right structure depends on how much support you want and how you manage customer relationships.

No. Debtor Finance is another term used for Invoice Finance. You may also see terms such as receivables finance, invoice funding, factoring or discounting, depending on the facility structure.

The position depends on your facility. With a recourse arrangement, your business generally remains responsible if a customer does not pay.

ScotPac offers Bad Debt Protection as an add-on to our Invoice Finance customers, which can protect up to 90% of approved invoice value, subject to approval and product terms. Our lending specialist can explain whether it suits your facility.

Once your facility is set up, customers are usually provided with new payment details through a Notice of Transfer.

Depending on your facility type, this may appear on your letterhead or ScotPac’s. In many cases, the practical change for customers is the payment account details. Your ScotPac specialist will explain how this works before the facility is put in place.

That depends on the facility. Invoice Discounting can provide greater confidentiality because your team generally keeps control of customer contact and collections. Invoice Factoring involves ScotPac supporting collections more directly. Notice and payment arrangements will be confirmed when the facility is structured.

ScotPac may advance up to 85% of eligible invoice value, subject to approval and facility terms. The remaining balance is released after your customer pays, less applicable fees.

Pricing depends on your turnover, customer profile, invoice terms, facility structure and whether you want collections support. A ScotPac lending specialist can provide a quote tailored to your business.

ScotPac generally looks for at least 6 months of trading, consistent invoicing and creditworthy business customers. Because the facility is linked to receivables, the quality of your customer book can carry significant weight, but approval still depends on the full assessment.

Not necessarily. Invoice Finance is linked to your accounts receivable, so ScotPac looks closely at the quality of your customer book, including whether your customers are creditworthy and pay reliably. Your own credit history still forms part of the overall assessment, but less-than-perfect credit does not automatically rule you out.

It may. Invoice Finance generally works where your business sells to other businesses on standard trade credit terms and invoices after goods have been delivered or work has been completed. Businesses that invoice in stages, bill in advance or sell directly to consumers may not qualify. Our team can review your arrangements and confirm whether Invoice Finance is the right choice for you.

Not necessarily. Invoice Finance can suit businesses generating at least $10,000 in invoices each month, so many smaller operators may qualify. Because funding is linked to the value of eligible invoices, the facility may also grow as your sales grow, subject to approval and facility terms.

Look beyond the headline rate. It is worth comparing the funding percentage offered, speed to first drawdown, whether collections are managed or confidential, how limits are reviewed as your business grows, and the total cost of the facility. You should also ask how each provider assesses your customers, because the strength of your debtor book can affect the funding available to you.

An overdraft gives your business access to general borrowing up to an approved limit. That can be useful, but the limit is usually fixed and may not increase just because your sales or invoice volume grows.

Invoice Finance works differently. It links funding to eligible unpaid invoices, with repayment generally occurring as customers settle those invoices. Because funding is connected to the value of your eligible invoices, the facility may be able to grow with your sales, subject to approval and facility terms.

This can make Invoice Finance a great option for businesses with strong sales but working capital tied up in customer payment terms. Facilities can also be reviewed as your requirements change, so your ScotPac specialist can help ensure the structure suits your business as it grows.

Once the facility is approved and set up, funds can be available in as little as 24 hours, subject to the terms of your facility.

ScotPac provides an online portal where you can upload invoice information, review available funding and access reports. The level of administration depends on the facility structure and how you choose to manage collections. Your ScotPac team is also available to support you throughout the life of the facility.