Invoice finance providers: which one is right for you?

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If you’re researching invoice finance providers, you might relate to one of these struggles:

  • You aren’t sure if invoice finance is the right solution for you, and you want to know more about what the different providers can offer.
  • You’re interested in trying invoice finance, but the offered advance rate was lower than you’d like, so you want an easy way to compare providers.
  • You’ve heard about hidden costs with invoice finance, and want to pick an invoice finance provider that is transparent about their fees. 
  • You’re hesitant to dive into full-book invoice financing – you want to see what else might be a better fit. 

In this article, we’ll compare five of Ireland’s top invoice finance providers. We’ll also look at the eligibility criteria for these providers, plus the businesses they might suit best.

We’ll cover:

Note: To find out how invoice financing could help grow your business, reach out to us

What are the top invoice finance providers in Ireland? 

Invoice financing, also known as invoice discounting, is a type of business finance that lets you use your existing contracts as general working capital by getting an advance on your unpaid invoices.

These invoices might have payment terms of 30-60-90 days. Instead of waiting for your agreed payment term, invoice financing allows you to get paid for up to 90% of these outstanding invoices in 24 hours. This unlocks the liquidity in your business, and gives you near-immediate access to a cash flow that can help grow your business. 

There are three types of invoice financing:

  • Full book: You use all of your invoices to raise working capital. 
  • Selective: You only raise certain invoices (your largest contracts).
  • Invoice factoring: The finance partner essentially takes over credit control, and manages payments of invoices.

The financing will either be: 

  • Disclosed: Your customers will know you are using invoice financing.
  • Undisclosed: Your customers won’t be aware of your invoice financing activity. 

For more in-depth information about how invoice financing works, see our article: Invoice discounting: How to get started.

Here’s a comparison of the top invoice finance providers in Ireland: 

Financefair AIB¹ Bank of Ireland² Bibby³ Close Brothers⁴
Products offered Full book and selective invoice financing Full book invoice financing Full book invoice financing Full book invoice financing and invoice factoring Full book invoice financing and invoice factoring
Maximum advance rate 90% of the invoice value 85% of the invoice value 85% of the invoice value  100% of the invoice value 90% of the invoice value 
Is the facility disclosed or undisclosed? Undisclosed Could be either, but more likely to be disclosed Could be either, but more likely to be disclosed Invoice finance is undisclosed, invoice factoring is disclosed Invoice finance is undisclosed, invoice factoring is disclosed
Cost per 30 days 0.75% to 1.50% Exact figure not stated on website Exact figure not stated on website  Exact figure not stated on website Exact figure not stated on website. Fees relating to your account are disclosed when your facility is arranged
Maximum facility size €1,000,000 Not stated on website Not stated on website Not stated on website Not stated on website
How quickly can you access funding? When your facility is in place, funding will be in your bank account within 24 hours Instant access to the agreed advance amount for new invoices Instant access to the agreed advance amount for new invoices When your facility is in place, funding will be in your bank account within 24 hours Instant access to the agreed advance amount for new invoices
Can you apply and manage your facility online? Yes, the entire process is online Can manage it online but you’ll need to apply in branch or with your Relationship Manager. You can email to get started Can manage it online but you’ll need to apply in branch or with your Relationship Manager. You can email to get started Yes Yes
Is a personal guarantee required? No Not stated on website  Not stated on website Not stated on website Not stated on website
Who qualifies?
  • Limited company with at least two directors
  • Trading for at least three years
  • Minimum annual turnover is €3m
  • Average debtor book is at least €500,000
  • Have an average on-going funding requirement of at least €150,000
  • Sell goods or services on credit to other businesses
  • Your ongoing trade debtor’s ledger is a minimum of €250,000
  • Invoice after goods and services are delivered
  • Have a satisfactory quality and spread of debtors
  • Use a sales ledger accounting system and appropriate credit control procedures
  • Sell on credit to business customers
  • Have a good spread of debtors
  • Growth potential
  • Good credit control
  • Provide goods and/or services to other businesses
  • Issue your customers with credit terms of between 30 and 90 days
  • Have strong credit management and control reporting tools
  • Can demonstrate a capable management team
  • Have been financially viable for a minimum of six months
  • Invoices are business to business
  • Minimum annual turnover is £750k
  • You want to finance all of your invoices, not just a few

 

Why choose Financefair as your invoice financing?

Financefair has provided Irish businesses with the working capital solutions they need to grow since 2015. In addition to invoice financing, we offer revenue-based financing and line of credit

Here’s what it means when you choose Financefair for your invoice financing: 

You can choose to fund just one invoice if you prefer 

When you choose Financefair for invoice financing, you have the option of either selective or full book. Selective invoice discounting allows you to get an advance on a select number of invoices, rather than your whole debtor book. This allows you to test invoice financing before making a large commitment. We are the only provider of selective invoice financing in Ireland.

Selective invoice financing could be right for your business if:

  • You’re a small business, and don’t have the operational resources to raise all of your invoices for invoice financing.
  • You have a few larger contracts and many small ones. The smaller invoices might not make a difference to growing your business.

Full book invoice financing might be a better option if: 

  • You’re a larger business with many significant invoices, and you want to finance all of them. 
  • You have a larger team and have the operational resources to manage full book. 

For an example of how selective invoicing helped a business grow, see our case study on how a company used their approved worksheets to expand in Europe.

You won’t find our fees confusing

Our pricing structure is simple. You’ll pay three fees:

  1. An annual platform or facility fee: This fee is fixed and we’ll charge you based on the facility limit provided.
  2. A discount or interest charge: This fee relates to how much funding you use in any 30-day period and depends on your credit score. The higher your credit score is, the lower your interest rate.
  3. A transaction fee or monthly service fee: This is a percentage of the overall invoice finance facility approved.

Our all-in cost of funding through our platform typically ranges from 0.75% to 1.50% per 30 days, depending on the product type, term and credit quality. 

To get an idea of how much an invoice finance facility would cost your business, try our calculators for full book invoice discounting and selective invoice finance

Who is Financefair good for?

Financefair is good for businesses who want:

  • An undisclosed facility: You manage your own invoices, and your customer won’t know you’re using an invoice financing company. Many SMEs prefer this approach, as it allows you to remain discreet..
  • To apply for and manage their facility online: You can apply to Financefair entirely online. Our platform means you can manage your facility online and upload your invoices directly.
  • The option to swap to a different form of financing: We want to see your company succeed and grow. As your business grows, we can help ensure you’re using the right financing option for your business needs – whether that’s invoice financing, revenue based financing, or line of credit. Once you’re part of our community, swapping products is simple.
  • Flexible funding limits: We know working capital can ebb and flow. For example, say you were using our revenue based financing facility. If you had a quieter quarter than expected with less revenue coming in, we can discuss reducing your funding rather than stopping it completely.
  • Funding with no personal guarantee: This means you don’t need to put your personal assets, like your home, at risk.
  • Funding without having blue-chip debtors: If you have a subscription or recurring revenue model, it can be tricky to get a business loan from the bank, which often only fund businesses with blue-chip debtors. Financefair can fund different business models, including a subscription-based model, using facilities such as revenue based financing

How to start financing your invoices with Financefair

To be eligible for Financefair invoice financing, you must:

  • Be a limited company with at least two directors
  • Have been trading for at least three years
  • Turnover at least €3m annually 
  • Have an average debtor book of at least €500,000

We can finance single invoices from €30,000 and provide up to €50m in annual funding if your company meets our criteria. It’s easy to get started:

  1. Apply: To apply for funding you can:
    a. Contact us directly to discuss your requirements with one of our team, who can quickly let you know if we can fund your business. Call +35315252486, email busdev@financefair.com, or book an appointment with us.
    b. Complete a funding application form. Submit it online, and our team will get in touch with you ASAP. 
  2. Offer: Within 24 hours of getting in touch, you’ll get an indicative offer.
  3. Onboard: If you accept our offer, we’ll run the necessary KYC and AML identity checks and onboard you onto the platform. 
  4. Funding: When your facility is in place, funding will be in your bank account within 24 hours.

Other invoice finance providers in Ireland

Financefair isn’t the only invoice financing provider in Ireland. Let’s take a closer look at some of the other options available to businesses in Ireland. 

AIB¹ 

AIB is a financial services group that operates in Ireland and the UK, offering banking and other services to personal, business, and corporate customers.

The eligibility criteria for invoice finance with AIB is:

  • Your ongoing funding need is at least €150,000, on average
  • You sell goods or services on credit to other businesses
  • Your ongoing trade debtor’s ledger is a minimum of €250,000
  • You invoice after goods and services are delivered
  • The quality and spread of debtors are ‘satisfactory’
  • You use a sales ledger accounting system and appropriate credit control procedures

AIB is suitable for businesses who: 

  • Want their funding from a more familiar source
  • Are happy to finance all their invoices

Bank of Ireland² 

Bank of Ireland offers a range of banking and other financial services to SMEs.

The eligibility criteria for invoice finance with Bank of Ireland are:

  • You sell on credit to business customers
  • You have a good spread of debtors
  • Your business has growth potential
  • Your credit control is good

Bank of Ireland is suitable for businesses who:

  • Want their funding from a more traditional source
  • Are happy to finance all their invoices

Bibby³

Bibby Financial Services offers SMEs a variety of funding options, including invoice finance and invoice factoring. 

The eligibility criteria for invoice finance with Bibby are:

  • You provide goods and/or services to other businesses
  • Your customers have credit terms of between 30 and 90 days
  • You have strong credit management 
  • You have a capable management team 
  • You’ve been financially viable for a minimum of six months

Bibby is suitable for businesses who: 

  • Are happy to finance all their invoices
  • Prefer invoice factoring over invoice financing 
  • Want to apply for and manage their facility online

Close Brothers

Close Brothers offers a range of funding solutions for Irish businesses.

The eligibility criteria for invoice finance with Close Brothers are:

  • Your invoices are business to business
  • Your business has a minimum turnover of £750k p.a
  • You’re interested in financing all of your invoices, not just a few

Close Brothers is good for businesses who: 

  • Have a large number of high-ticket invoices
  • Might prefer invoice factoring instead of invoice financing
  • Want to apply for and manage their facility online

What to consider when choosing an invoice finance provider

When you’re making a decision on invoice finance providers, there are a few things to keep in mind:

The advance rate: What is the ideal advance rate for your business? Many businesses are glad to be approved by an invoice financing provider only to discover that their advance rate is 65% rather than the expected 90%. A low advance rate leads to a situation where you’re still struggling to get the capital required and therefore defeats the purpose of getting financing in the first place. At Financefair, we offer up to a 90% advance rate.

Cost: It can be difficult to work out the cost of invoice financing with some providers, so it’s important to calculate the true cost rather than just going off the headline rate. It can also be difficult to make an apples to apples comparison since each provider will charge fees differently. Make sure you fully understand what the cost of funding for each provider will be.

Do you want full book ID or selective? With full book invoice financing, you finance all of your invoices. This costs slightly less than selective invoice financing, but it can be operationally intensive, particularly if you’re a smaller business.

Selective invoice financing allows you to finance only your highest invoices, significantly reducing the admin time. It also allows you to test invoice financing before committing your entire debtor book. Financefair is currently the only provider of selective invoice financing in Ireland. 

The type of debtors you have: If your revenue is non-contracted revenue or from subscriptions, invoice financing might not be the best fit. Other options like revenue based financing or line of credit might be more appropriate.

Not sure what type of financing would be right for your business? Get in touch with our team to learn more. 

Grow your business with Financefair invoice financing

In this article, we’ve compared the main invoice finance providers in Ireland, to make it easier to choose the right one for your business. We’ve also looked at why you might choose Financefair, plus the main eligibility criteria for a number of other providers.

Ready to explore invoice financing options for your business? Contact Financefair today to discover how we can help you grow your business. 

Sources

¹https://aib.ie/business/loans-and-finance/finance/invoice-finance
²https://businessbanking.bankofireland.com/credit/finance/invoice-finance/how-does-it-work/3
³https://www.bibbyfinancialservices.com/funding/invoice-finance-products and    https://www.bibbyfinancialservices.com/funding/invoice-finance-products/invoice-discounting
⁴https://www.closeinvoice.co.uk/invoice-discounting, https://www.closeinvoice.co.uk/how-our-fees-work and https://www.closeinvoice.co.uk/invoice-finance

 

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