Invoice Finance

What is invoice financing in South Africa?

Invoice finance is a type of funding that allows businesses to borrow money against their outstanding invoices.

There are two main types of invoice financing: invoice factoring and invoice discounting. Invoice factoring involves selling your invoices to a third-party lender at a discounted rate. Invoice discounting allows you to borrow against your invoices and keep them on your books.

Types of invoice finance to consider

Invoice factoring: Invoice factoring is when you sell your invoices to a third-party lender at a discounted rate. This can be a quick and easy way to get funding, as the lender will advance you the money immediately and then collect payment from your customer. However, invoice factoring can be expensive, as you will have to pay fees and interest on the loan.

Invoice discounting: Invoice discounting is when you borrow against your invoices and keep them on your books. This can be a more expensive option than invoice factoring, as you will have to pay interest on the loan. However, it can be a good option if you need to maintain control of your invoices and customers.

Invoice finance agreement

When you sign an Invoice Finance Agreement, you are agreeing to sell your invoices to a third-party lender at a discounted rate. This can be a quick and easy way to get funding, as the lender will advance you the money immediately and then collect payment from your customer.

Where to get invoice finance?

There are various places you can get invoice finance - banks or other financial institutions being the most traditional route. These bigger players, though, can make the process long and tedious.

Merchant Capital, while we don't provide invoice financing, is still your premier growth finance provider, and your best source – we’ll keep things quick and easy, with less stringent eligibility requirements, and more flexible terms, so you can get back to growing your business, with the loan that suits your specific needs.

When considering growth capital as a way to spark business growth, here’s how Merchant Capital can help:

• Smart lending – Bespoke cash flow-friendly advances to suit your business needs and specifications.
• Transparency – Openness and honesty at all times, especially when it comes to timelines, costs, and everything in between.
• Efficiency – From approval to analysis and then pay-out, we’ll make it happen in 48 hours, and keep you posted at every step.

Read on for more about the benefits of the SME cash advance.