Invoice finance (factoring or invoice discounting) advances a proportion of your outstanding debtor book — typically 70–90% of approved invoice values — so you receive cash before your customers pay. A Credicorp Business Loan injects a fixed sum of new capital, repaid on a fixed schedule, regardless of your debtor position. Both address working-capital gaps but from different starting points.
When invoice finance is the right tool
If your company's cash-flow problem is structural — you invoice promptly but customers take 60 or 90 days to pay — invoice finance solves the root cause. It scales automatically with your sales: as you raise more invoices, more cash is available. The facility grows with your business without requiring re-application. The cost is tied to the face value of invoices advanced and the time they are outstanding.
When a business loan is the right tool
A business loan is better suited to needs that sit outside your debtor book: paying a supplier before you have raised the invoice, funding a stock build, covering a tax payment, or bridging a gap that has nothing to do with slow payers. It is also simpler — one lump sum, a fixed term, a defined total cost. There is no need to assign invoices, no third-party contact with your customers (as happens in disclosed factoring), and no ongoing debtor-management admin.
Using both together
There is no conflict in holding invoice finance alongside a Credicorp facility. Many growing companies use invoice finance for their day-to-day debtor cycle and a separate short-term facility for episodic capital needs. Discuss with your accountant which layer fits which part of your balance sheet.
We lend only to UK limited companies and LLPs, and the loan is to the company with no director personal guarantee. As business finance outside the consumer-credit regime, it is not covered by the Financial Ombudsman Service or FSCS.
See also: Short-term loan vs long-term loan, Secured vs unsecured business finance