What charges apply to invoice finance?
The administration charge may be a flat monthly fee or a percentage of turnover. It is the subject of a formal quotation after the financier gains an understanding of the business and your requirements. The fee will typically be less than 1% of turnover for invoice discounting, and between 0.75% and 2.5% of turnover for factoring. For the finance that is provided in advance of customer collections, there is normally a discount charge calculated on day-to-day usage of funds. It is likely to be comparable to normal secured bank overdraft rates.
