Invoice Financing in First Horizon National Corporation

Invoice financing within First Horizon National Corporation provides a flexible working capital solution designed for businesses that issue commercial invoices and seek to improve cash flow without waiting for customer payments. This product converts unpaid invoices into immediate liquidity, helping companies stabilize operations, invest in growth, manage payroll, and bridge seasonal or cyclical gaps. Structured to serve a range of industries—from manufacturing and distribution to professional services and construction—invoice financing at First Horizon is positioned to support both small and mid-sized enterprises with practical underwriting and tailored service.

How it works

At its core, invoice financing allows a business to sell or pledge accounts receivable to the bank in exchange for an advance on the invoice amount. Typically, once an eligible invoice is verified, the bank advances a percentage of its face value, commonly referred to as the advance rate. The remaining balance, less fees and interest, is remitted to the business when the customer pays the invoice. This approach converts future receivables into current cash, enabling immediate deployment of funds to operational needs.

• Invoice submission: Businesses submit verified invoices to the bank for evaluation.
• Advance funding: After verification, the bank advances a portion of the invoice value, often between 70% and 90% depending on creditworthiness and sector risk.
• Collection and settlement: The bank collects payment when the invoice is due; the remainder is released to the business after deducting fees and interest.

Key benefits

Invoice financing with First Horizon offers several advantages that can be decisive for companies aiming to accelerate growth or smooth cash flow variability:

• Improved cash flow: Immediate access to funds removes the lag between delivery and customer payment, enabling prompt fulfillment of obligations.
• Flexible funding: Financing is tied to sales volume, meaning available capital can grow as invoice volumes increase.
• Preserve credit lines: Since this product is secured by receivables, it can complement or preserve existing lending capacity for other priority uses.
• Support for growth: Businesses can seize opportunities such as bulk purchasing, new hires, or entering new markets without waiting for receivables to mature.
• Outsourced receivables administration: Depending on the arrangement, the bank can handle collections and remittance processing, reducing administrative burden.

Types of invoice financing

First Horizon typically offers multiple structuring options to meet distinct operational and risk preferences:

• Factoring: The bank purchases invoices outright and assumes collection responsibilities. This often includes non-recourse and recourse variations to allocate credit risk between the client and the bank.
• Invoice discounting: The bank provides advances against invoices while the business retains responsibility for collections and customer relationships.
• Selective invoice financing: Businesses can choose which invoices to finance, offering flexible usage for varying needs.

Eligibility and underwriting

Eligibility for invoice financing typically hinges on several factors, including the creditworthiness of the invoiced customers, the quality and verifiability of invoices, the stability of the business’s operations, and overall sector risk. First Horizon evaluates receivables portfolios to determine advance rates, fees, and appropriate documentation. Common considerations include:

• Credit profiles and payment histories of the business’s customers
• Invoice accuracy, supporting contracts, and delivery records
• Concentration risk (dependence on a small number of large customers)
• Overall financial health and operational track record of the business

Costs and fees

Costs for invoice financing generally include a financing fee or interest charge on the advanced amount, and may include additional service fees for invoice verification, collections, or administration. Fee structures vary by the type of product (factoring vs. discounting), the level of service required, the creditworthiness of accounts receivable, and the competitive market. Transparent disclosure of pricing and fee schedules helps clients understand total financing costs and compare them against alternative financing options.

Operational considerations

When implementing invoice financing, businesses should pay attention to operational integration and customer communications. For factoring arrangements where the bank collects directly, notifying customers and managing the transition in receivables processing is important. For discounting arrangements, maintaining control of collections requires robust internal processes to ensure payments are tracked and remitted in accordance with the financing agreement.

Use cases and scenarios

Invoice financing is suitable for a wide range of situations, including:

• Seasonal businesses needing cash to increase inventory ahead of peak seasons.
• Companies facing rapid growth who need working capital to meet demand.
• Businesses pursuing time-limited opportunities that require upfront capital.
• Enterprises seeking to smooth payroll, vendor payments, and other recurring expenses during receivables cycles.

Risk management

Like any financing product, invoice financing involves risk. The bank manages credit exposure through customer credit assessments, concentration limits, and contractual protections. Businesses should maintain accurate billing and delivery documentation, diversify their customer base where possible, and monitor receivables aging to minimize disputes and collection delays.

Why choose invoice financing with First Horizon National Corporation

By combining industry experience, dedicated client service, and flexible product structures, First Horizon National Corporation aims to deliver an invoice financing solution that aligns with a company’s operational tempo and growth objectives. The bank’s approach typically focuses on understanding each client’s cash flow cycle, customizing terms to match invoice profiles, and providing timely funding to support strategic initiatives.

Whether a business is looking for a predictable way to convert receivables to cash, preserve other credit facilities, or outsource receivables administration, invoice financing can be a pragmatic financial tool. With careful planning and collaboration, it helps businesses maintain liquidity, reduce working capital constraints, and focus management attention on growth and profitability rather than on timing of customer payments.

Explore invoice financing options that best match your receivables profile, operational needs, and financial goals to determine the right structure and terms for your business.

Address Bank: Memphis, Tennessee, U.S.
Bank: First Horizon National Corporation
Headquarters: Memphis
Products: Business Financing
Type: Invoice Financing