Invoice Financing

CASHFLOW FINANCING

Get paid on your invoices without the wait

Invoice and trade financing lets a business advance cash against unpaid invoices, purchase orders, or trade documents — closing the timing gap between sales and collection.

ADVANCE RATE

70–90%

Of invoice face value

DRAWDOWN

Per Invoice

On-demand basis

SPEED

Days

Faster than term loans

BEST FOR

B2B SMEs

With creditworthy customers

What It is?

Invoice and trade financing is a revolving facility, not a lump-sum loan. Instead of taking out a single fixed-amount loan, a business is given a facility size and draws cash against individual invoices as they’re submitted. When the customer eventually pays the invoice, the proceeds settle the advance — and the SME receives the balance, less financing fees.

There are two main structural variants. Factoring is when the financier takes over the collection process and is notified to the customer. Invoice discounting is when the SME continues collecting payment as normal, often on a confidential basis the customer is unaware of. A third variant — purchase order financing — advances cash against confirmed orders even before invoices are issued.

Underwriting for invoice and trade financing differs from term lending. The lender focuses heavily on the creditworthiness of the customer being invoiced — not just the SME borrower. A small business selling to large blue-chip companies often accesses better terms than a larger business selling to smaller customers.

Why it works for B2B businesses

Invoice financing solves a specific problem term loans don’t address — the timing gap between sales and customer payment.

Self-Liquidating

Each advance is repaid when the underlying invoice is paid by the customer. This makes the facility short-term in nature and naturally tied to actual sales activity, rather than carrying long-term debt on the balance sheet.

Scales with Revenue

As invoicing volume grows, available financing typically grows with it. Facility limits are reviewed periodically based on actual receivables — making it a dynamic tool that expands as the business expands.

Speed to Cash

Once the facility is in place, drawdowns are fast — often within days of submitting an invoice. Significantly quicker than the credit assessment and disbursement process for term loans.

An Otter-ly Simple Way to Compare Invoice Financing