How Invoice Factoring Can Help Your Small Business Combat Debt Worries

It’s hard to start your own small business and not worry about the financial burdens that it can bring. You’re working hard and trying to keep your business afloat, but debt and cash flow is an issue that can be a real threat if you don’t manage them correctly. With more than 70% of small businesses failing in the first 18 months of operation, you can see why small business owners lose sleep at night.

All successful businesses have struggled with cash flow at some point; no matter how big or small you are. It’s a constant problem and one that needs managing daily. When payment terms are offered, there is always going to be a gap between completing the work, raising the invoice, and receiving funds even if you are paid promptly, add in some unexpected delays, and perhaps the need to pay your own outstanding bills while you wait can all lead to unexpected debt and cash flow issues.

Many small business owners approach banks to try and secure a loan or overdraft to cover this cash gap but, even if the finance is agreed (which unfortunately for new start-up businesses it’s often refused), then you are still faced with loan repayments, interest and a fixed amount of funding which doesn’t grow as you do.

An alternative, safe and viable solution is employing the services of a funder that specialises in helping small businesses and has various invoice finance options available to them. In this blog, we’ll go over the benefits of using a funder to help manage cash flow.

What is invoice finance?

People previously believed that invoice finance carried more risk than traditional finance or was a “second class” product but this certainly is not true today, invoice finance companies, particularly members of the UK Finance Association representing finance organisations and their customers, are accredited reputable companies’ who offer their clients security, stability, and flexibility and access to cash when they need it.

If you need a flexible line of credit to help manage cash flow, then invoice finance options such as invoice factoring are a real, safe, and viable option for your business. In fact, it’s more secure and safer rather than trying to do everything yourself. You have access to professional outsourced credit control, 5 days a week throughout the year with no break for holidays, or those urgent jobs that keep you away from chasing the money you are owed – all this and access to your cash when you need it.

An invoice factoring specialist will deal with the following:

• Credit control – Managing all aspects related to customer invoices and credit control, from monthly statements to calls and letters/emails including issuing reminders for overdue invoices. Such clear focussed procedures often move slow-paying customers to ones that now pay when due.
• Collection – Prompt payment of cash received ensures you get paid on time and dealing with any payment issues that may arise means your small business is always receiving the income it needs without having to worry about overdue payments or other such problems associated with collecting money owed.
• Tailored bespoke agreements – Specific to your business; this isn’t a one size fits all.

Independent factoring companies usually have credit control teams who specifically look after a smaller number of clients and their debtors, consequently, they can offer a much higher level of service, building valuable relationships across the supply chain, to ensure invoices are paid within agreed terms. Accredited companies such as Partnership Invoice Finance, not only help you with your credit control and cash flow, but we also offer our clients the security and comfort of knowing this vital aspect of running a business is taken care of – one less thing to worry about.

Don’t just take our word for it, here’s what some of our clients say …

“As a small business eager to grow, we were keen to find a factoring company that could demonstrate a genuine interest in our success and willingness to provide us with a more personable service. From our first point of contact with Partnership Invoice Finance, we have been treated as a valued ‘partner’ and have had a confidence that our business requirements are always taken seriously and dealt with both efficiently and professionally.”

“Partnership Finance have been an integral component in enabling Elsatex to grow its business tenfold over the past 5 years. With their friendly and personable approach, they are more like an extension of our company with our customers, and this has given us the confidence to be reassured that our debtors’ ledger is in safe hands – whilst we focus on the core elements of our business.”

At the heart of every successful organisation is the drive for professionalism at every turn. Our team is made up of dedicated, experienced, and highly professional experts who understand the need for discretion and efficiency.

Hiring an accredited financial funder that specialises in invoice factoring means that your credit control is managed by experts who will take care of all aspects related to managing invoices whilst you focus on running the day-to-day operations of your small business.

Contact us today so that we can start helping you to alleviate your worries over debt.