Releasing cash tied up in unpaid invoices, for the parts of healthcare that invoice other businesses on credit terms.
Who this is actually for
Invoice finance only works where you invoice other businesses on credit terms. That rules out most clinical practice. A GP surgery, dental practice or pharmacy is paid by the health service or by patients, not on 60-day trade terms.
Where it applies in healthcare:
- Medical and pharmaceutical wholesalers and distributors
- Healthcare staffing and locum agencies
- Medtech, diagnostics and device suppliers selling to trusts and private groups
- Care providers invoicing local authorities
- Contractors and service providers supplying the health sector
Indicative terms
- Facilities from around £50,000 to £10m, and to £50m for staffing businesses with specialist funders
- Advances commonly up to 90%, and up to 95% or even 100% from some funders
- Funds within 24 hours of invoicing once running
- Setup typically within a week on a straightforward case
- Bad debt protection available, and included as standard by some funders
Factoring or discounting
Confidential invoice discounting means your customers never know. You invoice and collect as normal; the funding sits behind the scenes. Most established businesses prefer it.
Factoring is disclosed, with the funder handling collections. Often seen as a negative, but for a growing business without a credit control function it delivers an outsourced collections team alongside the funding, which is a genuine benefit.
The three questions that decide the deal
Whether a healthcare supplier gets funded, and on what terms, comes down to three things. Ask them of every funder.
- What are your concentration limits? Most cap a single debtor at a quarter to a third of the ledger. Medical distribution and healthcare staffing are structurally concentrated, so this is where deals fail. Some funders apply no limits at all.
- What is your appetite for public sector debtors? NHS trusts and local authorities are strong covenants and slow payers with complex approvals. Funders vary widely.
- Will you fund application or framework-based billing? Some will not lend against anything other than clean delivery documentation. Others handle framework billing routinely.
Those three answers matter far more than the headline rate. A cheap facility you fail to qualify for is worth nothing.
Common questions
Will my customers know?
Not with a confidential facility. You invoice and collect exactly as now.
Can I fund selected invoices only?
Yes. Selective and single-invoice facilities exist, useful for a one-off large order rather than committing the whole ledger.
What if one customer is most of my ledger?
That is the case that fails at a generalist funder and succeeds at a specialist. Tell us the ledger shape early and we will go to funders who can actually do it.
All figures are indicative and subject to lender assessment, your circumstances, valuation and prevailing market conditions. Commercial mortgages and unregulated bridging loans are not regulated by the Financial Conduct Authority. Property offered as security may be at risk if you do not keep up repayments.