Sales Invoice Financing

Sales Invoice Finance

How it works

Sales invoice financing enables small and medium scale business owners (vendors) to raise capital by monetizing, or securing their customer-approved invoices. This allows the supply chain to function smoothly, which in turn allows for the growth and development of the business. LivFin offers sales invoice financing in India, allowing small and medium businesses to raise capital through their unpaid invoices.

Step 1
The vendor sells its products or services to a customer
Step 2
The customer approves and accepts the invoices from the vendor
Step 3
LivFin makes payment to the vendor on behalf of the customer
Step 4
Customer pays LivFin on or before the due date (60/90th days)

Most commercial vendor contracts have an extended due date in order to account for delays in delivery, working capital shortage or other policy reasons. However, the goods or services get delivered on or before the contract deadline. The vendor is given a customer-approved invoice for the delivery of the promised goods or services but the money is yet to be transferred, this tends to create a cash flow or working capital gap for the vendor.

This waiting period between the approval of the invoice from the customer and transfer of funds from the customer to the vendor is detrimental for the growth of small businesses. For instance, if the vendor gets a new contract from a different buyer during this period, his business might not be able to service the order because of lack of funds.

This is where LivFin’s sales invoice finance solutions help businesses get out of working capital shortage or cash flow gaps by providing quick unsecured business loans in lieu of customer-approved invoices.