Invoice Finance features

• Features and benefits
  • Invoice Finance quickly converts sales into cash and can release more funds than conventional sources of finance
  • You can take advantage of cash and bulk discounts from suppliers
  • Pay your suppliers promptly improving your company's business to business relations and payment reputation
  • Your business can remain highly competitive and offer attractive credit terms to consolidate and develop customers’ goodwill
  • The availability of finance to your business can grow in line with the growth in sales
  • Your relationship with customers is not affected by the Invoice Finance arrangement and your debtors are unaware of the funding facility
  • Funds that are released are used only as you need them
• Is your business suitable?

  Your business is suitable for Invoice Finance if:

  • You have an average on-going funding requirement of £100,000 or more
  • You sell goods or services on credit to other businesses
  • Your business has an ongoing trade debtor’s ledger of minimum £150,000
  • You invoice after goods/services are delivered/performed
  • You have a satisfactory quality and spread of debtors
  • You have a sales ledger accounting system and appropriate credit control procedures
  • Your business has a positive tangible net worth

  Examples of unsuitable debts for Invoice Finance are:

  • Debts which are regarded as cash sales
  • Sales to individuals
    
  • Invoicing in advance of delivery of goods or services
  • Export debts may not be suitable if they relate to territories outside of the Organisation for Economic Co-operation and Development (OECD)
• How it works
  1. You invoice your debtors
  2. Summary invoice details are then sent to AIB (NI)
  3. On your request, AIB (NI) will forward agreed prepayment of up to 90% of funds tied up in unpaid debtor invoices
  4. You continue to operate your usual credit procedures. Invoices are paid by debtors and these funds are lodged to a designated collection account
  5. The balancing 10% of the originally financed debt is made available to you, less AIB (NI) costs
• Customer example

  	> Amount £000's
  Total Debtors	1,000
  Less: Disapproved Debts *	(100)
  Approved Debts	900
  Available funds @ 90% of Approved Debts	810

  * Disapproved debts can include aged debts beyond a specified time limit, inter-company debts, disputed debts, contra balances where you are selling to your suppliers and cash sales.

• Costs
  • A Discount Charge (similar to an interest charge) is levied on the funds used by the customer and charged monthly
  • A Service Fee (related to the on-going management of the facility) is typically charged on an annual fixed fee basis and is billed at the end of each month
  • For more details, see our price list for business customers