For many businesses their biggest asset is their invoices. Collection of those invoices is also very often one of their biggest challenges. In small and medium sized businesses it can be one of the first tasks to get placed on the back-burner in busy or stressful periods. Ironically it's also the task that would greatly alleviate some of that stress if it were done.

Invoice finance or debtor finance are the generic terms used to describe the finance options open to companies who want to immediately realise the cash tied up in unpaid bills. Rather than having to wait 30 days or longer, once the agreement is finalised invoice finance can release up to 85% of the value of your sales ledger within days.

Invoice finance is only available to businesses that sell to other businesses on credit. It is not an option if your business only sells to the general public. Contrary to popular opinion however this form of funding is not exclusive to large companies. It can offer start-ups and young companies a great way to outsource a labour intensive part of their business right from the out-set leaving them free to focus their time on growing the business. It can also free up much needed cash within days.

There are three types of invoice finance:

• Factoring
• Invoice discounting
• Confidential invoice discounting (CID)

Which one will be most suitable for you will depend on the size of your business, whether you want to continue to manage the debt collection yourself or outsource that aspect of your operation and whether or not it matters to you if your customers know that you are using invoice finance.