Invoice finance for Newcastle upon Tyne service businesses

Arranging invoice discounting and factoring for Newcastle service firms

Invoice Factoring arranges invoice finance facilities for Newcastle consultancies, agencies, software houses and other firms that bill businesses on credit. We act as a broker: a funder provides the money, and our job is to find one whose criteria suit your ledger.

Facilities we can introduce

Most city firms ask about invoice discounting, where you keep credit control, or invoice factoring, where the funder collects payment on the invoices it funds. If clients should not see a third party, we can ask funders about confidential factoring. When only a few large invoices cause pressure, selective factoring may suit better than a whole-ledger facility.

From first email to a signed agreement

You send an enquiry through the quote form or by email. We review your sales ledger, clients and payment terms, then approach a funder that fits. The funder carries out its own assessment and sets the advance, fees and terms. We explain those terms in plain English, and you decide whether to go ahead.

Free quotes and straight answers

A quote costs nothing and carries no obligation. Every charge in an offer is explained before you commit, and if invoice finance looks a poor fit for your firm, we will say so. For Quayside practices and Helix technology firms that bill for time or milestones, the aim is to close the gap between paying staff and being paid by clients.

Which Newcastle businesses tend to use invoice finance?

The firms most likely to benefit are those that complete work for other businesses and invoice on credit terms. In the city that often means consultancies, engineering and design practices, IT and software services, recruitment agencies, marketing agencies and specialist contractors. The common thread is a gap between paying staff each month and receiving payment from clients weeks later.

It does not suit every firm. A practice that takes payment upfront, or bills consumers rather than businesses, will usually have little to fund. Recruitment shows the opposite case: an agency placing contractors with Newcastle employers pays those contractors weekly but may bill clients monthly, so the gap grows as it wins more placements.

Quayside offices, Helix and the riverside business park

The Quayside has long been home to law firms, financial services companies and corporate offices. Several larger practices have since moved into newer buildings at Newcastle Helix, the innovation quarter developed by the city council, the university and Legal & General, which also houses technology firms and the National Innovation Centre for Data. West of the centre, Newcastle Business Park has riverside office buildings used by a mix of service businesses.

For a funder, location matters less than the quality of the sales ledger. What these districts share is a concentration of firms that sell expertise by the hour, the day or the project, and that shapes how their invoices are raised and paid.

Billing for time, milestones and retainers

Service firms usually invoice in arrears. A consultancy may bill monthly for days worked, a software house may bill against project milestones, and an agency may run monthly retainers. Many Newcastle agencies and software firms mix these patterns, and each one affects how a funder views the ledger.

Time-based and retainer invoices

Regular monthly invoices for work already delivered are usually the simplest to fund, provided the client has signed off timesheets or accepted the service.

Milestone and stage payments

Invoices raised against a completed milestone can often be funded. Invoices issued before the work is done, or applications for payment the client has not yet agreed, generally cannot. If your contracts let the client withhold sums until final acceptance, expect a funder to look closely at those terms.

Supplying large organisations and public bodies in Newcastle

The city's large employers include the Newcastle upon Tyne Hospitals NHS Foundation Trust and Newcastle University, and many smaller firms supply big private and public organisations. These customers tend to have formal procurement and payment processes.

That can help, because large organisations are often seen as lower credit risk. It can also slow things down. Invoices may need a purchase order number, must match the agreed rate, or have to go through a supplier portal before they are approved. An invoice rejected for missing details is one a funder may not be able to advance against.

• Check each customer's invoicing requirements before you start work.
• Keep purchase orders, contracts and sign-offs with the invoice.
• Note any customer whose terms prohibit assigning debts to a third party.

What invoice finance will not pay for

Funding is linked to invoices issued for work completed or goods supplied. It does not cover salaries on a project that has not yet been billed, bid and pitch costs, or the cost of fitting out a new office. If your cash pressure comes before you can invoice, another type of finance may be more suitable.

It also has costs, usually a service fee and a charge on the funds drawn. Compare the total cost with the value of being paid sooner. Any figures a funder offers apply only after its assessment and are set out in the written agreement. Many funders also ask directors for a personal guarantee or indemnity, so check what will be required before you sign.

Documents to have ready

A funder will usually ask for a short set of records before giving an indication, and having them prepared lets us give you a clearer first answer. If you already have an overdraft or loan, that lender may hold security over your debts, and a new funder will need that position agreed first.

• An aged debtors report showing who owes what and for how long
• Recent management accounts and the last filed accounts
• Sample invoices, contracts or engagement letters for your main clients
• Details of any existing lending or security over the business
• A short note on how credit control is handled and by whom

What to put in a first message

A few lines on your business, its typical clients and your monthly invoicing are enough to start. Send them through the quote form or to info@invoicefactoring.org.uk. Firms south of the river may also find our Gateshead page useful, and every location is listed on the areas we serve page.