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Revolving Credit – Multi Invoice & Multi Debtor Finance

  • Whereas with the traditional types of invoice finance you will borrow against all or the majority of your sales ledger, this product allows you to only commit certain customers to the facility.
  • As an example, if you had ten customers, but only two who paid on slower terms, you could simply commit the two slower paying customers to the facility, and exclude the eight who pay well. Alternatively you can commit all customer (debtor) so that your borrowings can increased and decrease as you need so long as the borrowing remains within the formula and overall facility, no need to pay unnecessary interest like a term loan and yet can have assess to the fund at any time .
  • Compared to the more traditional products, Multi Invoice & Multi Debtors Finance is more flexible and is becoming more popular as it is very easy to use and easy to add new customer(debtors) to the facility and get new limit approved- you can borrow against them quickly.
  • Multi Invoice & Multi Debtors Finance not only helps to access funds immediately but also allows doing so at one’s terms. Such a process enables businesses to retain control over their processes and encourages zero third-party involvement.
  • Usually, it is considered to be cheaper when compared to raising money against every invoice. To elaborate, for invoice discounting, usually, the entire sales ledger is sold to a financier.

How it Works

Instead of select single Invoice (debtor) finance or financing against all customers on your sales ledger, you would only choose those you want to fund and commit them to the facility. Once you commit a customer to the facility, you must give all invoices for that customer to the selective invoice finance lender. You will receive two payments from the lender. The first payment will be the initial payment against the total invoice value, known as the advance payment percentage. The second payment is the remainder of the invoice, minus the agreed upon fee. This is the residual balance. Your customer will pay the lender back directly.

The basic steps of Multi Invoice Finance

The basic steps of Multi Invoice Finance are below:

  1. Initially, you will submit the invoices you would like to fund to the selective invoice finance lender.
  2. Once the amount of funding available per customer is agreed, the lender will do a verification with your customers.
  3. Once the invoice is verified, your selective invoice finance provider will advance the funds to you.
  4. Your selective invoice finance provider chases your customer for payment of the invoices which they have advanced funds against.
  5. Once payment has been made by your customer to the lender, you will receive the remaining balance of the invoice, minus the agreed upon fee.
Who is suitable for Multi Invoice & Multi Debtor Finance?

1. You are looking for something similar to a bank overdraft

2. You suffer from ongoing or occasional cash flow issues

  • In most cases, any business with creditworthy customers and good value invoices are deemed eligible for accessing funds that are otherwise blocked in pending invoices.
  • Other than these, companies subject to a low phase of the business cycle, wanting to keep their operational activities smooth can avail of this funding option as well.
  • Business that is seasonal and payment circle that is up and down as working capital in the form of term loan would be very expensive since some fund would be idle around when you are not in need.
  • Furthermore, individuals who do not intend to borrow funds against the entire sales ledger and wish to exercise the freedom to select specific invoices for discounting can also opt for this facility. 
  • It is said that evolving businesses are among the ones that tend to benefit the most from this particular invoice discounting option.