This comparison service is provided by Touch Financial Support Ltd.
Touch Financial is a leading UK invoice finance broker which works to help businesses find the right products for their needs. They compare invoice financing services from a range of different lenders, aiming to find the one that best suits the needs of their business customers. Touch Financial consultants look at the profile of each business, including cash flow, accountancy needs, and any other specific requirements, to match them with the most appropriate invoice finance provider and product. Touch Financial is a trading name of SFP Brokers Limited, authorised and regulated by the Financial Conduct Authority (FRN: 727220). Touch Financial is a broker not a lender.
Castle Business Finance Invoice Finance FAQs
Who is Castle Business Finance?
Castle Business Finance was launched in 2016 as a specialist provider of invoice finance and trade finance solutions. Based in the town of Portishead, Somerset, Castle provides funding for all types of SME across the UK.
Why do businesses use invoice financing?
Businesses turn to invoice financing products, from providers such as Castle Business Services, when they wish to make use of the money they’ve earned but they realise they’re short on much-needed cash flow, and more conventional means of raising finance are less favourable.
What does invoice financing entail?
As the name suggests, invoice financing involves borrowing money against the value of your own business invoices. Two common forms of invoice financing Castle Business Services and other lenders provide include invoice factoring and invoice discounting. It effectively leverages your invoices as collateral.
Is invoice financing a form of debt?
No, invoice financing with lenders including Castle Business Services is actually a form of sale.
Conventional business loans involve you incurring liabilities to borrow, but invoice financing allows you to borrow a given percentage of your own invoices - money already owed to you - so no new debt is created or required.
Is invoice financing hard to get as a small business?
It can prove to be harder for a younger, smaller business to acquire invoice financing products, simply because lenders could set lending criteria for you, such as having a high turnover or evidence of being an operating business for a minimum period of time, which might not apply to you.
How do factoring and discounting differ?
Invoice factoring involves selling your invoices to a factoring company via your lender, which is ultimately going to be responsible for chasing up clients on the money owed to you. Discounting puts you in control of your sales ledger, while your lender provides a percentage of the invoices owed to you. When invoices are paid in full, the lender pays the full amount.
Is invoice financing costly?
As with any financial product Castle Business Services or other lenders provide, invoice financing products do entail fees and costs if you require them. These take the form of weekly or monthly fees as a small percentage of the invoices you wish to leverage.
What happens if invoices aren’t paid on time?
Late invoice payment is often a reason in itself for seeking invoice finance in the first place, and this is when invoice discounting can help provide you with cash flow, at times when you have substantial sums owed to you, as you will have sold unpaid invoices to your lender.
But can I be made liable if clients fail to pay?
With invoice factoring, you might still be able to access cash flow using invoice financing without having to foot the bill, if a client fails to pay their invoice. Under a non-recourse agreement, the factoring company absorbs the costs of a failed payment. On the other hand, recourse agreements mean the risk is on your side, requiring you to pay if invoices aren’t paid.
Why is non-recourse more costly than recourse?
Under invoice factoring, the factoring company is trying to assess the risk in providing you with borrowings based on your invoices. A non-recourse arrangement makes it riskier for them, so they will likely charge higher fees. Under recourse agreements, you carry the risk instead, so the factoring company will typically offer a lower lending fee.
How do I compare invoice financing products?
If you wish to compare the invoice financing Castle Business Services provides with the products other lenders are offering, you can use our partner Touch Financial. They will provide you with a trained consultant, who will determine which lender best suits your business requirements. Follow the links provided at the top of the page to get started.
Services offered by this provider may change over time. Always check Ts&Cs.