Similar to Invoice Factoring, instead of selling invoices to factoring companies, small businesses with unpaid invoices can also use invoice financing to borrow against their own accounts receivables.
There are some differences to consider – When you use invoice factoring, you are essentially selling or re-assigning invoices to a third party company: the factor. The factoring company takes over the communications with your clients about their invoice, and the factor is the one processing the payment. With invoice financing, instead of having your clients direct their invoice payments to the factor, your clients will continue to direct their payments to you, just as they would before you initiated invoice financing. This is an important point because with invoice financing, you remain in control of the sales ledger, collections, and invoice processing. From a risk perspective, if your customer doesn’t pay their invoice, you are still required to pay the financier.
With Cloudfloat, we do things differently. Cloudfloat takes the risk away from your core business and takes on the risk ourselves. We extend payment terms to your customer. Your Customer pays via Cloudfloat and you get paid cash in the bank straight away improving your cashflow. Your Customer pays us over time.
Cloudfloat does not provide a factoring service nor does it finance or factor any of your invoices. We help to get your invoices paid immediately. We provide a quick and easy way for your customers to recieve payment terms whilst you get paid now. We call it buy now pay later business finance.
Select the Partner with us button below to learn more about getting paid quickly and improving your cashflow.