Long Term Cash Flow/Line of Credit
Cashflow finance advances money against your outstanding invoices (your accounts receivable). This means that as your sales grow, so does your line of credit.

There are three main types of cashflow finance:

•  Factoring
•  Invoice Discounting
•  Export Factoring (for export businesses)

Factoring
Factoring allows a business to secure cashflow against its invoices, but the financier manages the collection of invoices and the maintenance of the debtor's ledger.
It is suitable for all businesses that sell on credit terms to other businesses, but particularly those that lack the resources and expertise to manage their debtors efficiently, and those going through rapid growth phases.

Factoring is an alternative to an overdraft, without the restrictions of an overdraft.

Invoice Discounting
Invoice Discounting is applicable for businesses that need to access the money tied up in their invoices, but who wish to collect their invoice payments and manage and maintain their own debtor's ledger. It is designed for well-established companies who sell to other business on credit terms and who have expertise in managing and maintaining their debtor's ledger.

Export Factoring
Exporters face serious cashflow management challenges. All too often, goods are held up on docks and invoices take longer than expected to be paid. Overseas buyers increasingly expect favourable credit terms, which they are able to obtain in their local markets. To compete in this market, you will normally have to provide equivalent trading terms. In addition, you will have to deal with complex and time-consuming job of collecting overseas payments, handling different currencies, languages and banking procedures.

Instead of requesting Letters of Credit from your overseas customers, you can offer them open account trading terms while retaining the benefit of a cash drawdown facility.