Invoice finance funds can potentially play an important role in effective estate planning
Invoice finance funds make use of specific strategies intended to achieve returns through loans to small and medium enterprises (SMEs). Invoice finance is an alternative to a conventional commercial loan, where the loan is made against the expectation that outstanding invoices will be paid. In effect, the loan is secured against money owed to the original invoicing company.
Invoice finance funds do not differ much in their approach from the invoice financing provided by conventional commercial finance companies. An invoice finance fund will own one or more financing companies that will carry out the day-to-day administration of loans.
Invoice finance funds are also there to provide a stable investment return. Expertise is required to deliver smooth cash-flow and a transparent business model which investors can be confident in.
Invoice finance funds will typically ensure that professional teams of finance specialists are in place in the companies they own, with experience of the specific markets they manage loans within, and strong networks of professional relationships.
Invoice finance funds are active in a fast-growing market, a market that has emerged as commercial banks start to reduce their loan activity in the SME market. Invoice finance funds play an important role in ensuring that large parts of the UK economy are able to continue to function properly.