Credicorp

Invoice finance

Invoice finance is a way of raising funds against a business's unpaid invoices. Rather than waiting for customers to pay, the business borrows against the value of its outstanding receivables and receives cash sooner. It is a form of funding tied to the sales ledger, and is most useful for businesses that sell on credit terms and need to bridge the gap between invoicing and being paid.

What it funds against: Unpaid invoices — money owed by a business's customers.
Invoice factoring: The funder advances against invoices and collects payment from customers.
Invoice discounting: The business retains collection; the funding stays confidential.

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How invoice finance works

A funder advances a proportion of the value of qualifying invoices up front, with the balance (less charges) paid when the customer settles. The business gets working capital tied to its actual sales, which can flex with the ledger. In factoring, the funder also manages collection; in discounting, the business keeps that in-house and the arrangement can remain undisclosed to customers.

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How it differs from a short-term loan

Invoice finance is tied to the sales ledger and scales with it, whereas a short-term business loan is a fixed amount for a fixed need. Invoice finance suits a business with a steady flow of credit sales; a short-term loan suits a one-off gap. Each is a different tool, and a business may use them for different purposes.

Invoice finance and Credicorp

Credicorp provides short-term unsecured business credit — business loans, Credicorp Flex and Credicorp Slice — to UK limited companies and LLPs. We do not provide invoice finance. Where a business's need is specifically about releasing cash from its sales ledger, an invoice-finance provider may be the better-matched option. Credicorp is an independent UK lender, not affiliated with Credicorp Inc of Peru, Credit Corp of Australia, or any other Credicorp entity outside the United Kingdom (Company No. 16093826; ICO ZC157682).

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