Frequently Asked Questions

Below are three guides on the use of the FloFunder service, these are for Sellers – for companies seeking cash flow funding, Buyers – for those who wish to purchase invoices and receive a return, and Accounting Practices – for more information on how the service works.  Each guide has topics within it which group together similar information.

If you can’t find the answer you are looking for then please don’t hesitate to contact us, our details are at the bottom of the page.

Accountant’s Guide

Getting Started

Does my practice qualify?

The FloFunder service is only available to Accountancy Practices that have embraced online accountancy platforms and are looking to add value added services to their clients.

What is FloFunder?

PeerPay Limited have developed a software application, known as FloFunder, for accountants and their clients. The application can be used within the confines of a practice and their own clients, or as part of a wider group with several practices participating. The characteristics of the service are:

  1. Operates in a closed environment, with each practice having their own “version”, or as part of a wider group
  2. Anonymity of participants as appropriate,
  3. Only available to validated sophisticated funding clients that meet FCA guidelines,
  4. Not available to the general public,
  5. Invoice based cash flow only, no commercial loans,

The FloFunder Platform is offered as a white-label platform via a web-portal.

What is the aim of the FloFunder Service?

The aim of the service is to provide accountancy practices a value-added service to their business clients, both funders (buyers) and businesses seeking funding (sellers), which helps to differentiate their practice and their value added offerings from their competitors.

What does the FloFunder service do?

The service combines a group of funding clients to provide cash flow liquidity for those clients requiring short term invoice financing within the same accountancy practice, or as part of a wider group.  The funding clients purchase rights to an invoice from a seller company, looking for improved cash flow.  The FloFunder platform’s algorithm ensures that no single buyer is exposed to more than a maximum percentage of a single invoice, as set by the accounting practice, and firms cannot register as a buyer and seller at the same time.

What is in it for me?

We know that the best clients value their Accountants time and knowledge. By placing the Accountant at the centre of our process, this enables the practice to provide a service which allows companies who want to obtain a better return on their cash to fund vetted, established businesses that want to use the approved invoices to gain cash flow financing within the practice’s existing and future client base.

This is also a revenue opportunity as FloFunder will offer practices a commission on all Invoice Purchase transactions entered into and successfully concluded by participating authorised users.

Do I have to pay anything?

No, FloFunder is a subscription-free service that only earns commission when successful Invoice Purchase transactions are concluded.

Is there a contract?

No, all you need to do is subscribe and agree to some T&Cs.  To subscribe now click here.

What are my practice’s responsibilities?

Your practice is the “Service Manager” for your clients. You are responsible for deciding whether or not to invite your clients onto the service. You will have to register the clients that you wish to invite and confirm that you have undertaken your standard AML and KYC checks.
For businesses seeking funding (sellers), we will set their initial credit limit in discussion with you depending upon history and profile. The FloFunder platform learns in real time and credit limits are continually re-assessed.

How do I subscribe?

To subscribe you just need to answer a few simple questions about your practice – click here to subscribe.

What web browsers do you support?

Currently, FloFunder works with the latest versions of Chrome, Firefox and Opera.

General Questions

Are you regulated?

The FloFunder service is FCA registered (for Money Laundering purposes), and has been built with the aim of providing a better deal for SME businesses, investors and accountancy practices.

Currently, invoice finance falls under asset based financing, which is not a regulated activity by the FCA.  Should the FCA decide to regulate this activity we will ensure that we comply with their requirements.

What software does FloFunder link to?

FreeAgent and Xero at this stage from an accounting perspective. We will continue to evaluate all other popular cloud based accounting platforms and integrate with them when required.

What are the potential risks to funders (buyers)?

Based on our research, the market average for ‘auction’ invoice sites shows a loss ratio of 0.7%.
We believe that because we are offering the service within the existing client base of your practice, the failure ratio will be lower than this as all parties are known in the cycle and will have had more rigorous checks and internal controls placed on them.

If settlement fails what is the recourse?

All types of investment involve a degree of risk and the greatest risk with any type of funding is the possibility that a seller’s debtor will not pay or delays payment of the invoice as there may be a dispute against performance of a contract. All invoices placed on the FloFunder platform are with recourse to the seller and in the event of non-payment by the trade debtor the seller is required to repay the amount owed to the buyers.

How does an invoice purchase transaction work?

Registered businesses seeking funding (the seller) can only submit Invoice Purchase Requests via their online accountancy platform against a verified invoice. The FloFunder platform will match the funding risk profiles and criteria registered within the same practice. Upon being fully matched, the platform will generate an offer containing the terms and fees. There is no obligation for the seller to accept the offer but any offer will only remain valid for 48 hours (excluding weekends and English public holidays) from the time the offer is notified. Once accepted funds are committed and cannot be cancelled.

Each Funder (buyer) is only permitted to participate in the funding of any Invoice Purchase Request up to a maximum percentage of the overall value of the single Invoice Purchase Request (this maximum is set by the Accountancy Practice). For clarity an Invoice Purchase request comprises of a single invoice. No partial or multiple invoice submissions are allowed.

Upon acceptance by the seller, an Invoice Purchase transaction is formed and the platform allocates the appropriate proportion to each buyers record as well as recording the total transaction against the Seller’s Account. The seller will receive an Invoice Purchase Confirmation containing all material terms of the Invoice Purchase Transaction, including: amount of funding; weighted average interest rate; date for repayment; discount fee to be paid on the repayment date; amount of principal to be repaid on the repayment date; all fees and charges to be paid on the repayment date.

What type of business seek cash flow funding?

A business seeking funding (seller) must be an active UK based company registered at Companies House and not a public body, charity or trust. They must be actively trading and carrying on a business with a view to profit and using online cloud based accountancy software, such as Xero, for all their accounts and invoice generation.

What criteria does my client use for choosing an invoice to submit?

Any invoices that are submitted into FloFunder will need to fulfil the following criteria:

  • A minimum of £2,500 net value
  • Payment Terms are no longer than 90 days
  • The end debtor is an active UK company

The invoice must be created using the FloFunder invoice template that is compatible with your accounting software.

How much is advanced?

Upon approval and depending upon the risk profile, your client will receive between 85% and 100% of the gross value of any matched and accepted Invoice Purchase offer.

How long does it take for money to be released?

Advances are released after evidence that the invoice has been sent to your client’s customer. We anticipate 1 to 2 days.

How is the price determined?

The actual amount of discount fee payable by the business seeking funding (seller) is defined by both the seller and their end client’s risk profile and the length of time that the invoice remains unpaid. Upon acceptance of a Invoice Purchase transaction, the buyers commit funds of between 85% to 100% of the net invoice. The discount interest is payable on completion of the trade.

Does the funder (buyer) select invoices?

No, the FloFunder platform matches approved invoices against a pool of buyers meeting the return and risk criteria. Once funds are committed, the platform operates as an automated tool. The base rules of the automated engine are

  • Participation by a buyer is no more than a maximum percentage in any one invoice (set by the Accounting Practice), with risk spread across as many buyers that meet the matching criteria.
  • Buyers automatically participate in all available invoices matching their set criteria. The platform balances out all buyers so that every buyer has equal opportunity to match to invoices.
  • Invoices that fail to attract the minimum number of buyers based on the risk criteria will not be approved.
  • Only “approved” invoices can be submitted to the engine

Can the funder (buyer) be exposed to more than the maximum % of a single invoice?

No, as the platform is fully automated, the processing rules restricts exposure of a single buyer to the maximum percentage of the overall value of the single Invoice Purchase Request. The Accounting Practice will set this maximum percentage to the benefit of their clients.

Are Buyers and Sellers anonymous when using the FloFunder Service?

The FloFunder platform is totally automated and is anonymous to all parties when matching buyers to invoices. Anonymity is only waived if invoices are not paid and the debt chasing process begins.

How are risk profiles calculated?

The FloFunder platform links with your clients’ cloud based accountancy platform, currently Xero, to collect historical data. This data will complement your pre-registration profile data. Data will include the following from which a real time learning risk profile will be generated:

  • Active customers over the last 12 months
  • Number of invoices over the last 12 months
  • Number of invoices outstanding
  • Total amount outstanding
  • Customers of invoices overdue
  • Total amount overdue

The engine will also look at the ultimate debtors across all transaction as part of the “learned risk assessment”. This will be used to continually re-assess your client’s profile based on how accurate their assessment is of payment by due date and the average length of time their invoices remain outstanding.

What is an approved invoice?

Your client will have to prove that they have a genuine business relationship with their end client. When they submit an invoice to raise funds against they have to provide the company number (or name) of the end debtor, so that they can be verified against Companies House and attach evidence (in pdf format) that their customer will pay the invoice, this can be a contract or Purchase Order.

How does the matching work?

The FloFunder platform works using the latest artificial intelligence techniques. A sophisticated algorithim matches approved invoices looking for cash flow funding against a pool of buyers. The platform searches all buyer return and risk criteria records and validates that enough funds are available. By searching and matching in this way, all buyers get an equal opportunity to participate in the cash flow funding. This approach ensures that all buyers have the opportunity to achieve their stated return requirements.

The platform operates as an automated tool against the risk and return criteria so that buyers are not required to bid against every invoice submitted to the platform. Once funds are committed, the platform operates as an automated tool.

Reporting?

The platform provides real time dashboard information to all parties. As an accountancy practice you will have an overview of all transactions carried out within your closed user group.

What web browsers do you support?

Currently, FloFunder works with the latest versions of Chrome and Firefox.

Seller’s Guide

Getting Started

Do I qualify to be a seller?

The FloFunder service is only available via Accountancy Practices. If your Accounting Practice is part of the FloFunder service, they may invite you, as a business, to join the service.

What information is required?

To be able to register and use the service, your business must be using an online accounting software package, we currently support FreeAgent and Xero but others are in the pipeline. You will be required to provide relevant information about your business. Your Accountant will confirm that you and your business are compliant with Anti-Money Laundering regulations and Know Your Customer requirements. We will automatically check your credentials with companies’ house to ensure that you are a valid trading business and that your filings are up to date.

Is there a minimum invoice amount my business can sell?

Currently, the system requires a net minimum value of £2,500 on a single invoice.

What software does FloFunder link to?

Xero at this stage from an accounting perspective. We will continue to evaluate all other popular cloud based accounting platforms and integrate with them when required.

What web browsers do you support?

Currently, FloFunder works with the latest versions of Chrome, Firefox and Opera.

My email authentication code has not come through or is not valid – what should I do?

A verification code sent via email is valid for a limited amount of time for security reasons.  If you are having problems receiving the email the code may have expired by the time you try and use it.

It is possible to request a new code from the Email Confirmation Code screen by clicking on ‘Resend Token’.  This will generate a new code and send it to you via email once more.

Please check that the email has not been sent to your Junk folder in error.  Also ensure that the FloFunder email address that was used on your invitation email has been added to your list of ‘safe senders’ to ensure delivery to your inbox.

Are you regulated?

The FloFunder service is FCA registered (for Money Laundering purposes), and has been built with the aim of providing a better deal for SME businesses, investors and accountancy practices.

Currently, invoice finance falls under asset based financing, which is not a regulated activity by the FCA.  Should the FCA decide to regulate this activity we will ensure that we comply with their requirements.

My Account

How quickly is my account approved?

Once your Accountant has invited you to join the FloFunder Platform, the process steps should take less than 30 minutes. Once completed, formal approval is usually with one working day.

How do you verify my company’s identity?

We do this in two parts. Firstly, your Accountant verifies that you have an ongoing trading relationship with them and secondly we validate your details online with Companies House.

Can anybody in my Company use the service?

The security and access of your account is your responsibility. On registration a designated primary user must be identified and passwords created.

Do I remain anonymous when using the FloFunder Service?

The FloFunder platform is totally automated and is anonymous to all parties when matching buyers to invoices. Anonymity is only waived if invoices are not paid and the debt chasing process begins.

Can I submit multiple invoices?

It is possible to have more than one invoice submitted to the FloFunder Platform at any one time provided that you are within your credit limit.

How is my credit limit set?

Your Accountant, in conjunction with PeerPay Limited set your initial credit limit depending upon your history and profile. The FloFunder platform constantly learns in real time so your credit limit is continually re-assessed based on how accurate you are in your assessment of payment by due date of your clients. As you continue to use the service your credit limit evolves.

How is my reputation calculated?

The FloFunder platform links with your cloud based accountancy platform, currently XERO, to collect historical data. This data will complement the Accountancy’s practice pre-registration profile data. Data will include the following from which a real time learning risk profile will be generated:

  • Active customers over the last 12 months
  • Number of invoices over the last 12 months
  • Number of invoices outstanding
  • Total amount outstanding
  • Customers of invoices overdue
  • Total amount overdue

The engine will also look at the debtors across all transactions as part of the “learned risk assessment”. This will be used to continually re-assess your profile to give you the best price and service.

Cash Flow Funding & Invoice Purchase

What is an advance?

An advance is the percentage of the net value of your invoice that FloFunder will pay you immediately upon the sale of your invoice.

How does an Invoice Purchase transaction work?

Registered sellers can only submit Invoice Purchase Requests via their online accountancy platform against a verified invoice. The FloFunder platform will match submitted invoices to the funding profiles registered within the same accountancy practice. Upon being fully matched, the platform will generate an offer containing the terms and fees.

Do I have to use your invoice template?

No, although your invoice must contain our payment details so that your customers pay FloFunder directly.  Without this payment information on the invoice your advance will not be released.

Who can submit an invoice for purchase?

The registered Primary User of the FloFunder service at your company can log in and submit an invoice for authorisation.

How do I submit an invoice for purchase?

Existing invoices that fulfil the minimum criteria for submission into the FloFunder service are loaded directly from your accounting platform. Here they join a queue and you select which ones to submit for purchase. Once submitted you will need to provide the company number (or name) of the end debtor, so that their identity can be verified with Companies House. Evidence (in pdf format) has to be submitted to prove the validity of the invoice. This evidence can be a Contract or Purchase Order.

How long does it take for an invoice application to be reviewed?

We aim to review the Invoice Purchase application within the same working day. Success is dependent of there being sufficient available funds to match the request.

How long does it take to receive an offer?

Upon matching the invoice purchase request to available funds, the service will generate an offer within 30 minutes.

What is the criteria for an invoice to be able to submit it?

Any invoices that are submitted into FloFunder will need to fulfil the following criteria:

  • A minimum of £2,500 net value
  • Payment Terms are no longer than 90 days
  • Your customer is an active UK company
  • The invoice is within your credit limit
  • The invoice must have FloFunder payment details on it
  • If using Xero the FloFunder branding must be used

Why might my request for funding be rejected?

Your request will be rejected if any one of the following conditions exist

  • Your client’s risk profile doesn’t meet our criteria
  • An existing disputed invoice with your end payer
  • Insufficient funds available on the platform to match your invoice
  • You have reached your credit limit
  • Your account is suspended due to an overdue invoice

What happens if my invoice doesn’t match?

If the service is unable to match the application to available funds within 30 minutes an email notification is sent. The choices are:

  1. Continue to try and match funds (maximum period is 3 working days)
  2. Withdraw the application

Can I alter a submitted Invoice Purchase request?

Once submitted, the details of the Invoice Purchase request cannot be changed. If you have made a mistake you can cancel the submission and replace it with a new one.

Can I cancel my Invoice Purchase request?

You can cancel your Invoice Purchase request at any time before acceptance of a Invoice Purchase offer. Once accepted you are committed to the trade.

How do I accept an Invoice Purchase Offer?

After receiving the invoice purchase offer email, you should login into your FloFunder account, and go to Invoices > Offers Waiting to click on the offer and accept it.

How long do I have to accept an Invoice Purchase Offer?

An offer will only remain valid for 48 hours (excluding weekends and English public holidays) from the time the offer is notified.

Do I have to accept an Invoice Purchase Offer?

It is your choice, there is no obligation to accept the offer.

How do I reject an Invoice Purchase Offer?

After receiving the Invoice Purchase offer email, you should login into your FloFunder account, and go to Invoices > Offers Waiting to click on the offer and reject it.

What happens when I accept an Invoice Purchase Offer?

When accepted via the FloFunder Platform, an Invoice Purchase transaction is formed and the platform allocates the appropriate proportion to each buyers record as well as recording the total transaction against your account.
You will receive an Invoice Purchase confirmation containing all material terms of the Invoice Purchase Transaction, including: amount of advance; date for repayment; discount fee to be paid on the repayment date; amount of principal to be repaid on the repayment date; all fees and charges to be paid on the repayment date.

How much is advanced against my invoice?

Upon matching, and depending upon your reputation, and the number of days until payment is due, you can receive up to 100% of the net value of your invoice. This will be confirmed in the Invoice Purchase offer.

How long does it take for money to be released?

After confirming your acceptance of the Invoice Purchase offer it will take between 1 and 2 working days to receive your advance. Advances are released after evidence that the invoice has been sent to your customer has been received by PeerPay (FloFunder).

How is the price determined?

The actual amount of discount fee payable is defined by both your own and your end client’s risk profile and the length of time that the invoice remains unpaid. Buyers accrue discount interest on a daily basis until the invoice is settled.
At maturity your client repays the full face value of the invoice to your PeerPay account. PeerPay then repays the advance rate and all accrued discount interest to the buyer. The remaining balance (difference between the face value and the advance rate) is credited to your designated business banking account less platform fees.

What happens if an invoice is not paid by the anticipated due date?

If your end customer does not pay by the due date you will receive a notification from FloFunder. On receiving this notification, it is your responsibility to contact your client for settlement.
Until settlement is made the discount fee will continue to accrue on the amount outstanding at the same rate as the Invoice Purchase Transaction, from the due date for payment of the invoice until the date the invoice is paid in full.

What happens if payment is delayed longer than 30 days after due date?

All invoices sold are under full recourse to you. If an Invoice Purchase Transaction remains unpaid 30 days after the due date for payment of the invoice, you are obliged to immediately repay the advance together with the accrued discount fee owing under the Invoice Purchase Transaction.

What happens if my client won’t pay due to a dispute?

It is your obligation to repay the advance and the accrued discount fee. Your buyers have the right to pursue you directly for the amounts owing by virtue of their third party rights contained under the standard terms and conditions governing the Seller’s use of the Platform and its payment obligations as agreed to under those terms and conditions.
To protect your confidentiality, at the time of trade, the FloFunder platform operates anonymously so that neither party is aware of the others’ details. As detailed in the terms and conditions for all parties, the system will retain the details of all parties to the trade so that in the case of a default these details are available if required for legal action.

How does the matching work?

The FloFunder platform matches approved invoices against a pool of buyers meeting the return and risk criteria. Once funds are committed, the platform operates as an automated tool. The base rules of the automated engine are

  • No single buyer is exposed to more than a maximum percentage of any one invoice, with risk spread across as many buyers that meet the matching criteria.  The maximum exposure percentage and number of buyers that will participate in an Invoice Purchase is set by your Accounting Practice.
  • Buyers participate in every invoice that meets criteria providing sufficient funds available.
  • Invoices that fail to attract the minimum number of buyers based on the risk criteria will not be approved.
  • Only “approved” invoices can be submitted to the engine
Reputation Profiling

How does FloFunder verify my client’s identity?

When you submit an invoice for purchase, you have to provide your end client’s company registration number or select their name from a listing at Companies House. These details are reviewed by a FloFunder operative prior to your invoice being placed in the system for matching.

How does FloFunder verify that my invoice is genuine?

You will have to prove that you have a genuine business relationship with your client. When you submit an invoice to raise funds against you have to provide the company number (or name) of the end payer, so that they can be verified against Companies House and attach evidence (in pdf format) that your customer will pay the invoice, this can be a signed contract or Purchase Order verified by your client.

We respect your privacy and therefore invoices remain in your name. It is your responsibility to follow up with your client and stay in control of your client relationship.

How is FloFunder different from invoice factoring?

Factoring involves long lock-in periods and much higher costs. You hand over control of your sales ledger and collections. This type of finance locks businesses into a captive relationship, lacks innovation and is often inflexible to your needs. It provides whole turnover invoice discounting arrangements, not single invoice finance. There’s also a lack of confidentiality where factors take control of all of your customer collections. There are ongoing monthly service fees and high arrangement fees, contractual lock-ins with long notice periods and onerous security arrangements. You may also be exposed to having credit lines reduced with no notice.
FloFunder is focused on high quality ambitious businesses, dealing with rapid growth. The service is totally confidential, has no lock-ins, and you remain responsible for chasing payments from your customer.

Are you regulated?

FloFunder has been built with the aim of providing a better deal for SME businesses, investors and accountancy practices.
Currently, invoice finance falls under asset based financing, which is not a regulated activity by the FCA.  Should the FCA decide to regulate this activity we will ensure that we comply with their requirements.

Fees & Rates

What are the fees that FloFunder charge me as a Seller?

There are no subscription fees. You will only pay for what you consume. The average cost will be a weighted average between 1.5% to 2.75% of the net invoice amount per 30 days depending upon your reputation.
Your commitment and the fees that you are charged are calculated on a pro rata basis from the time when you receive advanced funds to the time when settlement is made by your client.
If you have calculated that your client will settle your invoice in 30 days and does so there will be no additional costs than those already advised upon your acceptance of the Invoice Purchase. For example, if settlement is made after 45 days then the additional discount fees will be calculated on a pro rata basis.

Is VAT charged?

We do not charge VAT on any transaction.

What is a discount rate?

The discount rate is calculated daily at a defined percentage based upon your reputation, and is used to calculate the charge for supplying an advance.

What is a discount fee?

The discount fee is the administrative amount due to the FloFunder platform.

Buyer’s Guide

Getting Started

Do I qualify to be a buyer?

The FloFunder service is only available via Accountancy Practices. If your Accounting Practice is part of the FloFunder service, they may invite you either as a business or as an individual to join the service.

Business buyer
A business buyer must be an active UK based company registered at Companies House and not a public body, charity or trust. They must be actively trading and carrying on a business with a view to profit.

Individual buyer
As an individual buyer, you must confirm that you are either a certified High Net worth individual or that you are a self- certified Sophisticated Investor as per the Financial Services and Markets Act 2000 (www.legislation.gov.uk/uksi/2005/1529/article/50A/made) and hold a UK Bank account.

Are any documents required?

No, upon registration, your Accountant will confirm that you and your business are compliant with anti-money laundering regulations and Know Your Customer requirements. We will automatically check credentials with companies’ house to ensure that you are a valid trading business and that your filings are up to date.

What do I need to complete registration?

During the registration process, to verify your identity, you will need:

  1. Access to your email account (if investing as a company you will need to use a company email address)
  2. Access to your mobile phone
  3. Details of your UK bank account into which you wish your earnings and capital to be paid, and access to your statements

Is there a minimum investment amount?

The minimum investment amount is £2,500.00

How quickly is my account approved?

Once your Accountant has invited you the registration process will take less than 30 minutes. Your account is then authorised (usually within one working day).

What web browsers do you support?

Currently, FloFunder works with the latest versions of Chrome, Firefox and Opera.

My email authentication code has not come through or is not valid – what should I do?

A verification code sent via email is valid for a limited amount of time for security reasons.  If you are having problems receiving the email the code may have expired by the time you try and use it.

It is possible to request a new code from the Email Confirmation Code screen by clicking on ‘Resend Token’.  This will generate a new code and send it to you via email once more.

Please check that the email has not been sent to your Junk folder in error.  Also ensure that the FloFunder email address that was used on your invitation email has been added to your list of ‘safe senders’ to ensure delivery to your inbox.

My Account

Where are my funds held?

Your funds are held on trust on your behalf in a physically segregated client trust account at Barclays Bank.

How do I withdraw my funds?

You can withdraw your unallocated funds from the FloFunder service at any time by logging on to your account and instruct withdrawal on the ‘Manage My Investment’ page. Withdrawn funds use the faster payment service from Barclays Bank and should be in your designated Bank account the same day.

How do I reinvest my funds?

Once a trade is completed the proceeds are not automatically reinvested. To reinvest your funds, log on to your account and follow the instructions on the ‘Manage My Investment’ page.

Can I buy multiple invoices?

The FloFunder platform will attempt to match as many invoices as available to your profile within the confines of your risk profile.

How are earnings calculated?

Your invoice purchase will accrue discount interest on a daily basis until the invoice is settled. Upon settlement, the seller’s client repays the full face value of the invoice to the seller’s PeerPay account. PeerPay then repays your portion of the initial advance rate (between 80 and 100% depending on risk profile) and all accrued discount interest.

What proportion of my funds will be invested?

For risk mitigation purposes, the system automatically restricts exposure of a single buyer to a maximum percentage of the overall value of the single Invoice Purchase Request (this maximum is set by your Accounting Practice). For clarity an Invoice Purchase request comprises of a single invoice. If sufficient invoices seeking cash flow funding are submitted within your Accountancy Practice that match your preferred profile you may reach 100% match rate.

Management of invoices

Once profiles have been created and funding placed in a client account, the service matches approved invoices against a pool of funds meeting the return and risk criteria. Once purchasing funds are committed, the platform operates as an automated tool so there is no need for you to bid on single or multiple invoices. All details of your bought invoices are available to you online.

Confidentiality

Please note that to protect all parties’ confidentiality, the service is anonymous so the only initial visible information about buyers and the seller will be each parties’ unique identifier code.

Anonymity is waived only when an invoice becomes overdue for payment and a buyer(s) wish to take legal action over the non-payment.

Investing In The FloFunder Service

How does an Invoice Purchase Transaction work?

Registered sellers can only submit Invoice Purchase Requests via their online accountancy platform against a verified invoice. The FloFunder platform will match submitted invoices to the funding profiles registered within the same network. Upon being fully matched, the platform will generate an offer containing the terms and fees.
There is no obligation for the seller to accept the offer but any offer will only remain valid for 48 hours (excluding weekends and English public holidays) from the time the offer is notified. Once the offer is accepted the trade is struck and cannot be cancelled.

On acceptance, the platform allocates the appropriate proportion of the invoice advance to your record as well as the discount fee agreed.

What type of business seek cash flow funding?

Sellers must be an active UK based company registered at Companies House and not a public body, charity or trust. They must be actively trading and carrying on a business with a view to profit and using online cloud based accountancy software, such as FreeAgent or Xero, for all their accounts and invoice generation.

How is the price determined?

The actual amount of discount fee payable by the seller is defined by their and their end client’s risk profile and the length of time that the invoice remains outstanding. Upon acceptance of an Invoice Purchase transaction, the seller receives the advance of between 80 and 100% of the net invoice. Upon settlement of the trade, the platform calculates the amount of discount fee payable to the buyer at the struck rate based on the actual number of days that the invoice was outstanding.

Do I select invoices?

No, the FloFunder platform matches approved invoices against a pool of buyers meeting the return and risk criteria. Once funds are committed, the platform operates as an automated tool. The base rules of the automated engine are:

  • A buyer purchases no more than the set maximum percentage of any one invoice, with risk spread across as many buyers that meet the matching criteria up to the maximum set by your Accounting Practice
  • A buyer can participate in every invoice that meets the criteria providing sufficient funds available, and the number of participants has not exceeded the maximum set
  • Invoices that fail to attract the set minimum of buyers based on the designated matching criteria will not be approved
  • Only “approved” invoices can be submitted to the engine

Can I be exposed to more than the maximum percentage of a single invoice?

The FloFunder platform searches all registered buyer return and criteria records and validates that sufficient funds are available to start matching. The matching process then attempts to match as many buyer return profiles to the “verified” invoice until a match is made. The matching is designed to spread the seller’s invoice over as many buyers as possible with transparency. This ethical approach treats all buyers as equal and ensures that all sellers get the most cost effective price.

Minimum Buyer Match: The minimum match number of buyers is set by your Accountancy Practice and may well consist of a blended rate basis consisting of a mixture of low and medium profiles. The seller will then be offered the blended rate to either accept or reject. 
Maximum Buyer Match: The system can be set to a maximum number of buyers for the match by your Accounting Practice. This ratio is done to ensure that all buyers can maintain effective daily control of the invoice if required.

What is my tax position on earnings?

You should seek your own tax advice as all earnings on the FloFunder Platform are paid gross.

Can I change my mind about investing?

After registration there is a 14 day period where you are able to postpone placing a deposit or change your mind about investing with FloFunder.  Should you however choose to deposit funds within this 14 days, we take this as an intention to invest immediately and an agreement that your 14 day cooling off period is waived.”

How much can be earned?

What can be earned using the FloFunder service?

The Returns calculator below will give you an indication of the discount interest that can be earned on your invoice purchases, should your risk and return profile and length of investment match those of the sellers using the FloFunder service.

Please ensure that the total percentage split of your investment between the Low, Medium and High return profiles adds up to 100%.

Amount to invest:
£

Low Percentage

%

Duration (days):
  1. 30
  2. 60
  3. 90

Medium Percentage

%

Duration (days):
  1. 30
  2. 60
  3. 90

High Percentage

%

Duration (days):
  1. 30
  2. 60
  3. 90
Low investment:
£
Medium investment:
£
High investment:
£
Possible Return:

£

Low: £
Medium: £
High: £
Risk

What is the risk of investing in invoices via the FloFunder Platform?

Invoice Trading is a growing mainstream international alternative finance product that enables businesses to accelerate their working capital by choosing to sell single invoices on the FloFunder platform to sophisticated investors who are seeking attractive returns within a common accountancy practice.

All types of investment involve a degree of risk and the greatest risk with any type of funding is the possibility that a seller’s ultimate debtor will not pay or delays payment of the invoice as there may be a dispute against performance of a contract. All invoices placed on the FloFunder platform are with recourse to the seller and in the event of non-payment by the trade debtor the seller is required to repay the amount owed to the buyers.

How does the FloFunder Platform evaluate the creditworthiness of each seller?

The service has taken all reasonable steps to minimise that risk by careful vetting that an invoice is genuine and falls within a seller’s normal course of business and client base that they are selling services to.

How does FloFunder make sure that an invoice is not fraudulent?

Potential sellers are invited to register on the platform by their accountancy practice. Upon registration, they need to confirm that they are compliant with their Accountancy practices anti-money laundering regulations and requirements. A series of identity validation checks (companies house, contact, address and bank details) are undertaken before the seller is required to confirm their acceptance of the published terms and conditions to gain access to the FloFunder platform. In addition, the service vets that an invoice is genuine and falls within a seller’s normal course of business and client base that they are selling services to.

What is the risk that the invoice will default?

PeerPay Limited will take all reasonable steps to minimise that risk, by careful vetting that an invoice is genuine, and falls within a seller’s normal course of business with a client base that they are selling services to.

All invoices placed on the FloFunder platform are with recourse to the seller, and in the event of non-payment by the trade debtor the seller is required to repay the amount owed to the buyers, as detailed in the terms and conditions signed upon acceptance onto the system.

Based on invoice factoring and online auction published delinquency and actual loss statistics ,and our own real time risk model, we have anticipated less than 0.5% potential loss. These figures will be carefully monitored and reported by both the Accountancy practice as well as PeerPay’s management.  PeerPay reserves the right to reject a potential seller if, in PeerPay’s opinion, the seller does not meet the risk profiles.

What happens if an invoice is not paid by the anticipated due date?

The platform monitors anticipated maturity date and prompts the seller to actively chase their client for settlement. If the seller’s end client does not settle the invoice at the maturity date, FloFunder will inform the accountancy practice and all parties to the trade that settlement is delayed.

Sometimes settlement may be delayed for very good reasons and all buyers will have the option to agree that the discount fee can continue to accrue for a set number of days up to a maximum of 30.

All invoices sold are under full recourse to the seller and unless an extension is agreed, they are obliged to immediately repay the advance together with the accrued discount fee owing under the Invoice Purchase Transaction.
FloFunder is not a party on either side of any Invoice Purchase Transaction and our role is to administer the Invoice Purchase Transaction. In the event of non-payment of an invoice, the subject of an Invoice Purchase Transaction, and the subsequent failure by the Seller to repay the capital sum (together with all accrued discount interest both before and after the due date for payment) the buyers have the right to pursue the Seller directly for the amounts owing by virtue of their third party rights contained under the standard terms and conditions governing the Seller’s use of the Platform and its payment obligations as agreed to under those terms and conditions.

At the time of trade, the FloFunder platform operates anonymously so that neither party is aware of the others’ details. As detailed in the terms and conditions for all parties, the system will retain details of all parties to the trade so that in the case of a default these details are available if required.

How are the risk bands defined?

We operate 15 different levels of risk validation with ratings of 1 to 9 within each category. From these a composite risk analysis is performed and a weighted score is allocated to each seller, who is then classified into a low, medium or high risk profile. This risk score is dynamic and can go up as well as down based on learned performance.

Composite Profiles: In addition to the risk weighting analysis, we use historical data from the cloud accounting platform, as well as their accountant’s knowledge of their business to determine the health of the Seller’s business, the nature of their end clients, the frequency of business traded, average invoice size, the industry sectors, average DSO and business projections. This approach ensures that risk profiling remains proactive and dynamic as opposed to static information.

Seller’s end clients: The engine will also look at the ultimate payers across all transaction as part of the “learned risk assessment”. This will be used to a) continually re-assess the seller based on how accurate the Seller’s assessment of payment by due date is and b) to ensure that any potentially single counterparty risk across practices is mitigated. The above aims to mitigate the underlying risk of non-payment of invoices bought and sold on the platform in a way that no other platform does and thereby aiming to minimise potential risk to each buyer’s money.

Learned process: The FloFunder platform integrates data from multiple sources to ensure that risk profiling is continuously updated in real time. Our validation checks include full integration into the Xero cloud accounting platform for complete trading history, payment patterns of trade debtors, validation against purchase orders and contracts, verification of invoice with end debtor, predictive analysis of timely settlement, integration via APIs to Companies House for active trading information.

What levels of risk can I choose from?

At FloFunder we take the management of risk seriously.
The risk assessment begins with the Seller pre-registration process that captures information from your accountancy practice not otherwise available. We also have pre-approved access to Seller’s trading history from their accountancy software provider, and finally we check their records with Companies’ House.
The FloFunder Platform not only risk assesses the Seller but also their customers, when invoices are submitted into the FloFunder service, and payment of the invoice is made.
When all the data is gathered we use multi point evaluation tools to create a risk profile, and once collated we assign a risk rating to each Seller.
FloFunder’s unique intelligent algorithms then constantly assesses the Seller’s use of the service, and re-evaluates their risk regularly, so your investment is always matched to appropriate opportunities.

As a Buyer you are given the right to choose your own investment return profile to define the level of return sought.
You define the length of time (30, 60 or 90 days) and the investment amount, both as a percentage, up to a maximum of 50% and as a fixed amount. This risk management approach ensures that if you are matched to a high value invoice from a seller, your exposure is limited to either your percentage amount or your fixed amount, whichever value is lower.
The risk assessment of the transaction is used to set the minimum level of matching return required. It is therefore possible to achieve a medium, or high return, even on a low risk transaction based on funds available.
You will be offered three categories; LOW, MEDIUM and HIGH.

If you are risk adverse, you may wish to choose a LOW risk setting. We classify a LOW risk Seller as one, for example, that has no bad debt, has a high credit rating, is selling an invoice that is a low percentage of their turnover and has a low DSO value (daily sales outstanding) and that has previously used invoice finance.
If your attitude to risk is about average (you are neither risk adverse nor a high risk taker) you may want to select a MEDIUM level of risk. A MEDIUM risk Seller is one, for example, that is selling an invoice with a higher percentage of their turnover or may not have submitted an invoice from this customer before. To receive a medium risk, their accountancy practice would have known them for several years.
Finally, if you want higher returns on your investment but are willing to accept the possibility that some losses may happen, you may want to choose a HIGH risk setting. A HIGH risk Seller is classified, for example, as a company who is selling an invoice which is a high proportion of their turnover, or who have a single high value transaction with their client, who may be unknown to FloFunder. They may be new to invoice finance or are a fairly small company.

Are you regulated?

The FloFunder service is FCA registered (for Money Laundering purposes), and has been built with the aim of providing a better deal for SME businesses, investors and accountancy practices.

Currently, invoice finance falls under asset based financing, which is not a regulated activity by the FCA.  Should the FCA decide to regulate this activity we will ensure that we comply with their requirements.

Fees & Rates

What are the fees that FloFunder charge me as a Buyer?

There are no subscription or transactions fees payable to the FloFunder platform. When settlement is made the proportion of your advance and the discount interest earned are paid to your FloFunder account. You then have the option of transferring this amount to your business banking account or use it to purchase more invoices as per your defined criteria.

What are the rates that I possibly earn as a buyer?

You will receive between 0.5% – 1.5% per 30 days on any funds matched via the platform. Earnings are dependent on your investment return profile (Low, Medium or High) that you created on registration and the number and value of invoices available that are matched. Potentially, you could earn between 6% and 18% per annum.

Is VAT charged?

We do not charge VAT on any transaction.

Contact Us

If you have a question that isn’t answered here please find us at:

Email –  enquiries@flofunder.com

Phone – 0208 004 6910