The Benefits of Invoice Financing
Running a business is challenging enough, but what if you’re trying to grow your company too? In order to expand your business, you need to maintain a healthy cash flow. That is easier said than done, and fear of the unknown or lack of information can often hold you back from exploring outsourced financial services such as invoice financing. In this article, we will explore how invoice financing works and why it’s a wise choice for growing businesses.
What is invoice finance?
Invoice finance is a flexible and viable way to maintain positive cash flow without having to take on new debt, inflexible loans or pledge personal assets. It is a specific type of asset-based lending, that allows you to receive an advanced payment against the value of unpaid invoices. Simply put, the funder allows you access to an amount equal to a fixed percentage of your unpaid invoices (usually between 70% and 90% of the total) before they have been settled by your clients.
Contrary to widespread belief you retain 100% of the invoice value and only pay a small fee for the use of the facility – like you would any finance product.
Invoice finance is a tried and trusted way of helping businesses keep their cash flow healthy, with the ability to help the business grow. In the UK approximately 35,000 businesses regularly use invoice finance companies with some £27bn of funding available.
The truth about invoice finance
The truth is that invoice finance is NOT a scary way to finance your business’ cash flow that you may have heard it was. Unfortunately, invoice finance was less well understood in previous decades and in some quarters picked up a bad reputation dating back from the early 1980s, but modern financing is a world away from that. Gone are the days of being tied into long, unfathomable, and difficult, contracts with expensive fees and costs. Invoice finance is now a recognised tool that small-medium businesses can use to manage their cash flow, grow their business, and outsource their credit control, with flexibility and low fees, leaving you firmly in control.
• is ideal for small-medium businesses selling to other businesses on credit terms.
• provides access to cash without the business having to sell inventory or other assets.
• is a far more flexible option than traditional borrowing- providing finance that grows as you do.
• doesn’t require you to provide additional personal collateral for factoring, which is often required when you take out loans from banks and other financial institutions.
• has a straightforward application process. Invoice factoring with Partnership Invoice is quicker than the Bank- typically a facility is agreed upon within 48 hours with the first drawdown of cash to you shortly after.
• is an efficient and flexible way of borrowing money.
• gives you access to the value of invoices before they are paid-typically within 48 hours of raising them.
• allows you to decide to either have your whole turnover funded or choose which invoices your business would like to factor.
How Partnership Invoice Finance can help your business.
Accredited companies such as Partnership Invoice Finance, not only help you with your credit control and cash flow, but they also offer their clients the comfort of knowing this important aspect of running a business is taken care of, giving you one less thing to worry about.
When a business enters a factoring arrangement, whilst the funder is responsible for collecting payments from your customers themselves, they do not have any say in who you work with or which projects you take on. You still make all the critical business decisions and remain in full control of your business.
We want to help your business grow, which is why we offer invoice finance to start-ups, SME’s and those requiring funding up to, and in the region of, £1,000,000. We are a secure, stable, and reputable lender who offer our clients greater levels of transparency and control.
Understanding how your business works is essential for us to develop a programme that aligns with your growth strategy. Our team has extraordinary business experience, and we’re committed to making growth happen.
Appointing a funder to handle your invoice finance is a big decision – one that you need to get right. At Partnership Invoice Finance our team is made up of dedicated, experienced, and highly professional experts who understand the need for discretion and efficiency. We have the experience and expertise so contact us today!