From XU Magazine, 
Issue 32

Why you should re-consider Invoice Finance for your clients

And the common misconceptions explained

Articles on Invoice Finance often start with an awkward acknowledgement of Invoice Finance’s reputation. A sheepish half-apology for its historic shortcomings.
This article originated from the Xero blog. The XU Hub is an independent news and media platform - for Xero users, by Xero users. Any content, imagery and associated links below are directly from Xero and not produced by the XU Hub.
You can find the original post here:

The apologies need to stop. At least from fintechs..

Companies like Satago have spearheaded the reinvention of Invoice Finance over the last few years. 

The bottom line is Invoice Finance has evolved to become a fantastic way to access working capital for a business.

Why Invoice Finance?

The ability of businesses to ‘pivot’ has proven invaluable during the pandemic.

But as ‘unprecedented’ events occur more frequently; businesses need more breathing room to be able to adapt.

Whether that’s to dodge problems or pounce on opportunities – a flexible and responsive working capital strategy is critical.

There are lots of finance solutions available on the market today, but Invoice Finance stands out amongst the crowd for a variety of reasons.


Unlike loans, offering a one-off cash injection, Invoice Finance is a revolving credit facility. It’s more flexible because every sales invoice presents an opportunity to access cash without waiting for the invoice to be paid in line with credit terms.

Overdrafts and credit cards offer more flexibility than loans but are usually limited in size. Invoice Finance facility limits are usually much higher and are often a follow-on product for businesses that have outgrown their overdrafts.

Security requirements

Invoice Finance facility limits can be greater than unsecured loans, overdrafts or credit card facilities because the borrowing is secured.

But rather than being secured against physical assets, the funds are secured against sales invoices. Security against tangible assets is not often needed.

Securing against invoices also means that rates are in line with secured lending, helping to keep costs down.

Cost effectiveness

Aside from Invoice Finance generally being cheaper than overdrafts and credit cards, Satago goes further to keep costs down by dynamically assessing the risk levels of the invoices to be funded. This allows our customers to choose the lowest risk (and therefore cheapest) invoices to fund against.

Additionally, the flexibility to draw funds only when they’re needed can also help keeps costs down, safe in the knowledge that you have an accessible facility to lean on.


Requesting a further advance on a loan or an increase to an overdraft would usually involve a lengthy application process and potentially require management accounts to support the application.

With fast approval processes and a direct connection to accounting software packages, Invoice Finance can scale much more closely with the business and its growing working capital requirements.


Fintechs are characterised by their ability to move quickly. It’s one of the reasons they’re growing in popularity compared to the classic custodians of capital – the banks.

One customer who recently came to Satago was just over a week away from missing payroll. By working with their advisor, we got them set up on the platform, opened a facility and had funds with them in time for payday.

What’s the catch?

There’s no catch - embracing modern Invoice Financing over traditional products is the equivalent to embracing Cloud Accounting over Desktop.

But there are some myths that surround Invoice Financing that hold people back from getting started.

Let’s look at five common Invoice Finance myths and see how we’re working to break them at Satago:

1. It’s only for businesses in trouble

This is a historic stigma. Many companies nowadays use Invoice Finance as a tool for growth. Over 40,000 businesses of all shapes and sizes in the UK currently benefit from the extra working capital these facilities provide.

Even so, Invoice Finance can be discreet – with Satago, Trust bank accounts are set up in the business’ name and, with our Full Invoice Finance option, the facility can be confidential.

2. Clients lose control of their debtors and must fund everything

While a lot of Invoice Finance options do require all debtors to be part of the facility, Satago offers the option of Single Invoice Finance. This means your clients can pick and choose which invoices they want to fund, giving them full control of their debtors.

Satago doesn’t take control of your customers’ credit control process or client relationships - whether they select invoices to fund or fund the entire debtor ledger, keeping the ownership within the business.

3. Once you’re in, you can’t get out

While 12 month contracts are standard practice for Full Invoice Finance facilities, Satago doesn’t impose any minimum (or maximum) term on our Single Invoice Finance solution – businesses are free to come and go as they please and can switch seamlessly between facilities, providing all the flexibility they need.

4. The hidden costs add up, making Invoice Finance quite expensive

With Satago you can be assured of fair and transparent pricing with no hidden charges. All our fees are clearly shown within the platform when showing all the eligible invoices available for funding against, so your clients know before signing on the dotted line exactly what the costs will be.

5. It’s a hassle to set up and manage

This may have been true in the past, but cloud accounting, APIs and open banking have slashed the time it takes to get set up.

With Satago, it couldn’t be easier to manage your facility. With Satago, it couldn’t be easier to manage your facility. Refer your client, and once they’re signed up and approved, they’ll receive the cash in the bank in a matter of hours. Satago connects to most accounting software and automatically shows how much funding is available.

Satago has spearheaded the reinvention of Invoice Finance over the last few years making it a valuable tool for businesses to help support their growth ambitions and worthy of a place in your advisor’s kitbag.

Why leave it there?

To find out how Invoice Finance can help your clients

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