Frequently asked questions (FAQ)
- For Businesses
- For Investors
- For Partners
- About MarketInvoice
- Who can use MarketInvoice?
- How much does it cost?
- What is the assessment procedure for new sellers? Would my company have to go through a credit check, assess terms and conditions?
- Will MarketInvoice contact any third parties to process my application?
- What kind of debtors are acceptable on MarketInvoice?
- How is this different to traditional invoice discounting or factoring?
- Will my customers know that I will have sold an invoice?
- What happens if an invoice does not pay?
The funding process and platform
- Is my financial information secure? Who can see this information?
- Is there an absolute limit on the time taken for collection?
- Into what account does the invoice payment flow?
- My current facility is certain with the invoice discounter, why would I change to an uncertain market based solution?
- How can I be sure that my invoices will attract bids?
- Is MarketInvoice complex and administratively difficult to operate? Is there a way to cut the admin (especially as I am a small start-up business owner who has to focus on the core product)?
- supplies goods / services to other businesses (including the public sector)
- can provide us with detailed financial information
2. How much does it cost?
For details on cost, please see our auction calculator. All costs are on a per auction basis – that is, you only pay when you use the service, not on a contracted basis in months when you do not use MarketInvoice. It is a “pay as you go” service.
3. What is the assessment procedure for new sellers? Would my company have to go through a credit check, assess terms and conditions?
There is a checking procedure that MarketInvoice carries out prior to any company trading on the platform. Not every company is accepted. There are significant checks for fraud, other debentures, etc. Additionally, the invoicing must be directly to the large corporate debtor rather than to an intermediary. We will be happy to guide you through this process which is relatively quick and painless.
4. Will MarketInvoice contact any third parties to process my application?
MarketInvoice does not contact any external parties during the processing of applications. Applying to MarketInvoice does not in any way affect your credit rating.
We may need to make contact with either your bank or your customer once you are accepted onto the platform. This of course is never done without your consent.
5. What kind of debtors are acceptable on MarketInvoice?
Not all debtors are acceptable for invoices sold on the MarketInvoice platform. MarketInvoice does not allow companies to auction invoices that are to other SMEs. We assess each invoice and debtor on a case by case basis. Details on our assessment criteria are provided below:
- Ownership: Invoices for companies listed on stock exchanges are generally acceptable, in addition to companies that are backed by venture capital companies or owned by private equity. Government debt is acceptable.
- Size: Debtors that have revenue in excess of £50m are more likely to be accepted than smaller companies
- Credit worthiness: Debtors that have traded debt or outstanding bonds on an exchange are more likely to be accepted than not. Companies that have high yielding debt are less likely to be accepted than companies with low yield debt. Companies that are likely to go into administration or bankruptcy will likely not qualify as debtors on MarketInvoice
- Profitability: Companies that are highly profitable, particularly after debt servicing and other liabilities after interest are taken into account, are more likely to be accepted on MarketInvoice
- Geographical location/ domicile: Companies that are based in the UK or OECD countries are more likely to be accepted than those that are not. Companies that are based in countries that have significant fraud or money-laundering histories are likely to be rejected.
6. How is this different to invoice discounting or factoring?
Unlike invoice discounting, you only sell the invoices you want to sell, and there are no restrictive covenants or personal guarantees. There are no ongoing monthly service fees or non-use fees. Where traditional invoice discounters do not accept certain invoices or turn down your application, by posting the invoice on our platform you might be able to find an investor keen to buy.
7. Will my customers know that I have sold an invoice?
In most cases, we are able to operate a confidential service for our clients, where your customers will not know that you are using MarketInvoice. You retain the communication with your customer, and it is your responsibility to chase up the invoice. Your customer will pay the invoice to an account in your name held with MarketInvoice, but our name will not appear on the account.
8. What happens if an invoice does not pay?
If you receive advanced cash on a sold invoice, and the invoice is not eventually paid by your customer, you will have to refund the amount owed to the investor. The invoice sale is recourse to you in the event of non-payment by the trade debtor. The time at which the seller must refund the money to the buyer is called the Repurchase Date. The Repurchase Date is 60 days after the expected (rather than stated) payment date.
The funding process and platform1. Is my financial information secure? Who can see this information? Only institutional investors or qualifying high-net-worth individuals are allowed to purchase invoices. All investors registered on the platform have been fully vetted by MarketInvoice and sign up to strict confidentiality agreements for the information they are able to access on individual businesses and invoices. They are only able to use this information to price a bid for an invoice, and are forbidden to share this information with any third party.
2. Is there an absolute limit on the time taken for collection? We have worked with invoices that have taken up to 5 months to pay previously. Given that the platform is a marketplace it can handle a range of receivables. It is best to consult with us in advance of the auction occurring so that we can solicit buyer feedback and assess appetite.
3. Into what account does the invoice payment flow?
Should you sell an invoice on MarketInvoice, your customer (trade debtor) will have to pay the invoice amount into an account held on the platform. MarketInvoice is currently using Barclays Bank to host these client accounts. This account will be held in your name to maintain confidentiality and MarketInvoice will only have the right to remit funds as per the standard rules. Your client account is completely segregated from MarketInvoice’s financial accounts (you will receive a letter from Barclays confirming this).
4. My current facility is certain with the invoice discounter, why would I change to an uncertain market based solution?
Facilities with banks and factoring companies are not certain – both are able to cut lending facilities overnight. Most independents recover high fees as the underlying client goes into difficulty through penalty payments. With MarketInvoice, investor diversification and market based pricing means more certainty of funding as there are multiple sources of finance all in one centralised platform. Moreover, current trading statistics show an average of 2.5 bids per auction which shows there is significant buyer demand for invoices. During registration, the MarketInvoice team will help sellers identify those invoices which are likely to attract bids versus those that will not. As a general rule, invoices to large reputable repeat customers are most likely to attract the best bids.
5. How can I be sure that my invoices will attract bids?
At MarketInvoice, we will work with you to best understand which of your invoices have the highest likelihood of attracting bids from our investors. We can offer advice as to the correct pricing of invoices on our system.
6. Is MarketInvoice complex and administratively difficult to operate? Is there a way to cut the admin (especially as I am a small start-up business owner who has to focus on the core product)?
Marketinvoice is a very simple and easy to use web-based application. Contrary to whole turnover factoring facilities, there is no requirement for you to run a separate ledger. The system is quick and easy-to-use. To launch an auction you simply upload your invoice, supporting documentation, and set your threshold parameters.
- Who qualifies to be an Investor on MarketInvoice?
- What is the minimum amount I need to start trading?
- What does MarketInvoice charge me as an Investor?
- Do I need to hold my funds with MarketInvoice for a minimum period? Is there any lock-up?
- Where do my funds with MarketInvoice sit?
- What is the default rate on MarketInvoice?
- What happens if the invoices are paid late? Does the interest still accrue pending repayment of the invoice?
- Is MarketInvoice regulated by the Financial Services Authority (FSA)?
- What is the sign up process for a new Investor and how long does it take?
- Does MarketInvoice charge VAT on the Investor fee?
- How is my personal data going to be used by MarketInvoice?
1. Who qualifies to be an Investor on MarketInvoice?
Qualifying high net worth individuals, sophisticated investors, or institutional investors (funds, investment companies) may all apply to become investors on MarketInvoice. We do, however, reserve the right to approve and reject applications based on internal criteria not disclosed publicly. More information can be found on our investor pages.
2. What is the minimum amount I need to start trading?
The minimum participation rate is £50,000, with most of our Investors deploying significantly more than this on a monthly basis. Please note that you will have to credit your client account with funds before you gain access to the MarketInvoice platform. There is no requirement to deploy £50,000 in any given auction and investors can take fractions of invoices as little as 1% or as much as 100%.
3. What does MarketInvoice charge me as an Investor?
MarketInvoice charges 20% of any profits earned by investors on the MarketInvoice platform. There is no sign-on fee and no-ongoing service fee charged to investors who have capital invested.
4. Do I need to hold my funds with MarketInvoice for a minimum period? Is there any lock-up?
At MarketInvoice there is no minimum or lock-up period. You are free to redeem your holdings by giving us relevant bank instruction. You must wait for any funds outstanding and invested in invoices to pay out according to their maturity before you can redeem deployed cash.
5. Where do my funds with MarketInvoice sit?
MarketInvoice does not take any deposits directly. Your funds are placed in a segregated client account maintained by our partner Barclays Bank. These funds are legally and factually separate from MarketInvoice’s balance sheet. At no point do your funds flow into any of MarketInvoice’s own bank accounts. Should you win an auction, MarketInvoice has authority to move funds from your account to the destination third party account of the Seller.
6. What is the default rate on MarketInvoice?
If you would like more information regarding total funds advanced and the default rates since inception, please register your interest to become a Buyer and we will send you more information. You can do this via our online application form.
Yes. All fees accruing to Investors are calculated on a daily rate. Therefore if invoices are paid late (or early) Investor fees accrued will be adjusted accordingly.
8. Is MarketInvoice regulated by the Financial Services Authority (FSA)?
Invoice finance falls under asset based financing and currently in the UK this is not an activity regulated by the FSA. MarketInvoice does not invest any capital into invoices itself or on behalf of any third parties. We do not take client deposits or give any investment advice.
9. What is the sign up process for a new Investor and how long does it take?
Qualifying applicants will be invited to complete our application form online. MarketInvoice is subject to the Money Laundering Regulations 2007, and as such is obliged to collect Know-Your-Customer information (proof of identity and address), and conduct anti-money laundering checks. Once you have signed up to our standard Master Rules, MarketInvoice will open a client account for you with Barclays Bank. When this account is created you will have to pre-fund your account before you gain access to the platform. The whole sign up process takes 1-2 weeks.
11. How is my personal data going to be used by MarketInvoice?
MarketInvoice is obliged to collect personal data to adhere to HMRC Anti-Money Laundering and Know-Your-Client protocols. This data is only used to evaluate your suitability to become an Investor on MarketInvoice and not for any other purpose.
- Does MarketInvoice accept referrals and, if so, from what kinds of partners?
- What benefits can MarketInvoice offer to my clients?
- What companies are suitable for MarketInvoice’s service?
- What situations can companies use MarketInvoice for?
- Is MarketInvoice easy for my clients to use?
- Does it matter if I don’t have a client to refer to MarketInvoice yet?
- How do I register as a partner with MarketInvoice?
1. Does MarketInvoice accept referrals and, if so, from what kinds of partners?
MarketInvoice does accept referrals and has had many successful relationships with partners. Our partners are accountants, business advisors, trade associations, legal advisors, angel investors and insurance brokers. Most of these are SME-focussed, but we accept referrals from all types of partners.
- Speed: Getting starting takes under a week. There is no need for site visits, no meetings, and no form filling – everything can be done online.
- Flexibility: No need to use on all invoices or all your customers. Businesses can raise finance on demand, with no contractual lock-in, no minimum or break fees.
- Transparency: No hidden or ongoing fees: understand the price before paying.
- Confidentiality: Your client’s customers don’t need to know about the arrangement.
3. What companies are suitable for MarketInvoice’s service?
Companies suitable for MarketInvoice’s service are UK companies with revenues of between £250,000 and £50 million who sell goods or services mostly to large companies with revenues greater than £50 million. MarketInvoice is used by clients in the engineering, wholesale, export and import, consultancy, film, software and recruitment sectors, among others.
- Companies with seasonal revenue streams
- Companies looking to finance exports
- Companies with long payment terms
- Companies looking to increase working capital to expand the business
- Companies with large projects and significant costs upfront
5. Is MarketInvoice easy for my clients to use?
Marketinvoice is a very simple and easy to use web based application. Contrary to whole turnover factoring facilities, there is no requirement to run a separate ledger. The system is quick and easy-to-use. To apply takes 10-15 minutes and businesses will have a response from us within 48 hours. Once registered, requesting draw-downs takes minutes, with funding obtained in under 24 hours.
6. Does it matter if I don’t have a client to refer to MarketInvoice yet?
No, just register using this form, then simply tell us about any opportunities that arise with any company or client which might be suitable.
7. How do I register as a partner with MarketInvoice?
Register using this form.
- What is MarketInvoice?
- When was MarketInvoice established?
- Who is MarketInvoice backed by?
- Where is MarketInvoice based?
- Is MarketInvoice regulated?
- What happens if MarketInvoice goes out of business?
1. What is MarketInvoice?
MarketInvoice is the UK’s first online funding portal allowing businesses to draw down fast and flexible funds against their outstanding long-dated invoices. The process is simple – UK businesses apply online and raise working capital against their invoices to blue-chip customers. In this way, these business can draw down larger amounts of funding than a typical overdraft or bank loan would allow. MarketInvoice can also be used alongside bank finance such as overdrafts, term loans and even factoring lines. Funding is sourced and allocated by MarketInvoice through a network of institutional investors and sophisticated high net worth investors. Funds are matched through a competitive online auction.
3. Who is MarketInvoice backed by?
MarketInvoice is backed by a select group of experienced private investors, including successful business owners, entrepreneurs, financial services experts, and angel investors. You can see more detail on our team page.
4. Where is MarketInvoice based?
MarketInvoice is based in London, United Kingdom. Our office is located at 35 South Street, London W1K 2XE (nearest underground stations are Green Park and Bond Street).
5. Is MarketInvoice regulated?
None of MarketInvoice’s activities fall under the definition of a regulated activity at present. Invoice finance falls under asset based financing and currently in the UK this is not a regulated activity (i.e. we cannot ask the FSA to regulate us). Additionally, MarketInvoice does not invest any capital into invoices itself, nor does it invest on behalf of any third parties. We do not take client deposits nor give any investment advice. Our legal advisors are continuously tracking whether any of our activity falls under regulation of any form in the evolving financial services legal landscape. MarketInvoice does comply with HMRC Anti-Money Laundering and Know-Your-Client protocols.
6. What happens if MarketInvoice goes out of business?
Client funds invested or received over the MarketInvoice Platform are held in segregated client accounts hosted with Barclays Bank. These funds are never transferred into MarketInvoice accounts at any point. Should MarketInvoice go out of business and administrators be appointed, this segregation and other measures taken by MarketInvoice ensure that all transactions are fulfilled and settle with no business disruption to registered users. Our bank is fully aware of the nature and details of our arrangements and would support the settlement process.