Invoice Finance made simple
Often called cash flow finance, invoice discounting, or factoring, the cash generated from invoices due to you can often help deal with:
- Tight cash flow
- Start up finance
- Expanding your business
- Winning new contracts
- OR just getting enough cash from your hard work, in order to live better
Faster payment of invoices means that you can react quicker to changes in the market or take advantage of low cost purchasing opportunities.
Many businesses are profitable with a good order/sales ledger but with little or no cash in the bank they are financially vulnerable. If a large debtor does not pay on time it is likely to have an effect on the ability of the business to pay its debts leading to late payment penalties or even worse future credit being refused.
Invoice finance helps to smooth these fluctuations and gives businesses a stable financial platform on which they can grow.
How does invoice finance work?
Simply, an invoice finance company will lend you up to 80% of your unpaid invoice value (including VAT) within 24 hours of you raising the invoice. So you don’t have to wait 45 plus days for your customer to pay you. The 20% balance of the invoice is paid to you by the invoice finance company when your customer pays the invoice. The invoice finance company will even do your credit control for you.
The costs of an invoice finance facility can be lower than you may think. The credit control function of your business can usually see a benefit in reduced costs as invoices are often chased by the provider of the cash flow finance facility. Administration is also simplified, and that in turn brings cost savings to the business. And of course having cash in a business when it’s needed relieves stress and makes the business more secure and more flexible.
For more information on how we can help put cash back into your business use the “contact us enquiry form below