How does Satago's Invoice Finance work, and what are the different types available?

Satago's Invoice Finance service is designed to help businesses improve their cash flow by providing advance payments against outstanding B2B (business-to-business) invoices. This financial solution is particularly advantageous for companies that typically extend credit terms to their customers, who may take anywhere from 30 to 90 days to settle payments. By doing so, it effectively unlocks working capital that would otherwise be tied up in accounts receivable.

The platform offers advance rates of up to 90% on the value of financed invoices and is as a "99% paperless solution," highlighting its digital efficiency. Satago provides two main types of Invoice Finance, allowing businesses to choose the option that best fits their financial needs and operational preferences:

• Single Invoice Finance (also known as Selective Invoice Finance): This option allows businesses the flexibility to select individual invoices from their sales ledger for funding. It does not require a minimum contract period, making it a more adaptable solution for occasional financing needs. Typically, this facility is disclosed, meaning the business's customer is informed of Satago's involvement in financing the invoice. Pricing is usually structured on a per-invoice basis, and to qualify, invoices generally need to be within their agreed payment terms.

• Full Invoice Finance (also referred to as Full Ledger Finance): This comprehensive option provides funding against all eligible invoices within a business's sales ledger. It usually involves a minimum contract period of 12 months. A key feature is its confidentiality; customers are generally not informed that their invoices are being financed by a third party. The pricing structure is designed for the entire facility, accommodating invoices that are up to 120 days past their due date. Full Invoice Finance is typically aimed at more established businesses, specifically those with an annual turnover exceeding £400,000, requiring a funding facility of at least £100,000, and having a trading history of more than 12 months.

The availability of these distinct options illustrates Satago's understanding that different businesses have varying financing requirements and preferences for managing their debtor books. Some enterprises may only need occasional, selective cash flow injections, making Single Invoice Finance ideal for them. Conversely, others might seek continuous, comprehensive funding across their entire sales ledger, making Full Invoice Finance a more suitable choice. The platform's description as a "seamlessly interchangeable solution" suggests inherent flexibility, allowing businesses to adapt their financing arrangements as their circumstances and needs evolve over time.

A defining characteristic of Satago's Invoice Finance offering is its reliance on technology to enhance efficiency. Features such as "fast approval for financing, in only a few clicks," fully automated reconciliation (notably the "zero reconciliation" benefit associated with Full Invoice Finance), and a predominantly paperless application and management process represent a significant advancement over more traditional invoice financing methods, which can often be slow and burdened with administrative tasks. This operational efficiency is largely achieved through direct API (Application Programming Interface) connections with a business's existing accounting software, enabling real-time data processing and assessment.

Moreover, a notable value-add is that both types of Invoice Finance from Satago include access to the platform's integrated credit risk tools and automated credit control functionalities at no additional cost. This bundled offering goes beyond merely providing funds; it aims to actively enhance the client's overall financial management practices. By equipping clients with tools to improve their collection processes and better understand debtor-related risks, Satago seeks to create a more sustainable and mutually beneficial financing relationship, potentially reducing risk for all parties involved.