What is invoice financing? How to get paid before your customers pay
By SendPay Business · · 2 min read
Invoice financing lets a business get cash from invoices its customers haven't paid yet. A finance provider advances most of the invoice value straight away and pays the rest, minus fees, once the customer pays.
Factoring vs discounting
- Invoice factoring: the provider takes over collecting payment from your customers, so they know you're using finance.
- Invoice discounting: you keep collecting payments yourself, and your customers usually don't know.
What it costs
Providers charge a service fee, often a percentage of turnover, plus a discount charge that works like interest on the money advanced. There may also be set-up, exit or minimum fees, so compare the total cost.
When it helps
It suits businesses that sell to other businesses on 30, 60 or 90-day terms and need cash sooner. It's less useful if most customers pay at once by card or payment link.
Where SendPay fits
SendPay doesn't offer invoice financing. SendPay platforms let your customers send invoices and payment links under your own brand so they can get paid sooner, powered by licensed partners.
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This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. PayPal, Patreon and Substack are named as reference points only and are not affiliated with SendPay Business.