Advantages of Invoice Finance

Despite what the media tells you about the faltering economy, there are businesses that are thriving while rival companies around them crumble into dust. Essentially, it is possible for your business to be selling products so quickly that you can’t afford to pay for the next batch. More companies than ever before are turning to invoice finance to prevent them from being in this situation. Credit terms are usually on 30-60 days, with no cash received from sales. How can you purchase new goods? Invoice finance could be the key to solving your problems and here’s why.

Cash Flow Saviour

Invoice factoring is a form of asset based lending and involves a lender paying you up to 95% of the value of your invoice within24 hours of it being raised. After the customer has paid the provider in full, your business receives the remaining balance minus the service fee. You don’t have to worry about reaching your overdraft limit as the facility grows in line with your turnover.

Plan Ahead

You can’t be certain when invoices will be paid, there is no way to look into the future. However, you will have weekly/monthly payment commitments that you are required to meet. With invoice finance, you know exactly when you’re getting paid and can plan accordingly. Large quantities of goods can be purchased and the business can thrive instead of merely surviving.

Respect

Although the clients would never admit it, there are some who take advantage of a company’s generosity. If a 30 day payment option is offered, the client will use every single day which greatly hinders the creditor and in a lot of cases, will pay late. It is not uncommon for clients to ask new companies for 60 day payment terms. When the same clients deal with an invoice finance provider, they tend to repay what they owe much faster. This is due to an expert credit controller looking after the debt and offering reminders as and when needed.

Security

Invoice finance providers perform a credit check on your potential clients You can also avoid bad debt through the process of non-recourse factoring. This means that you are not responsible to take on the bad debt should your customer be unable to pay.

We can offer you financial solutions to help keep your cashflow healthy. Request a quote now to find out how much invoice finance can save you.


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