How Small Businesses Can Better Manage Debt with Invoice Finance
If you’re a small business owner, then you know that managing debt is a daunting task. Every day it seems like there’s another bill to pay and another interest rate to worry about. This can be especially difficult when your business is just starting out and you don’t have the profits readily available to cover your expenses.
Debt is a common issue for small businesses and can be extremely stressful leading to a lot of sleepless nights. However, there is hope! Invoice finance can take the worry out of managing debt and allow you to focus on running your business.
In this post, we will discuss how invoice finance can help small businesses better manage their debt. We’ll talk about the different types of debt faced by small businesses and how invoice finance can help alleviate the pressure.
Types of debt faced by businesses.
Businesses face many types of debt. The most common type is that over a short-term, which is typically used to finance inventory or cover operational expenses such as everyday costs of running a business, wages, and marketing. Alongside this, there is often longer-term debt, such as mortgages or loans used to finance equipment purchases which are typically secured against collateral.
Invoice finance can help small businesses manage all types of debt. For example, businesses can use invoice finance to smooth out trading peaks and troughs to free up cash flow when required, in order to meet payments when they fall due or replace current debt with a facility that may be more suited to the business needs. And, if it is appropriate for the invoice finance to repay secured debt, then such a facility (which is secured against your debtors) may enable the release of other assets that had previously been pledged to a lender.
How invoice finance agreements can help!
Invoice finance helps businesses in a number of ways, but one of the most important is by improving cash flow. When businesses have invoice finance in place, they can get immediate access to cash, which can be used to pay off debts faster. This improved cash flow can make a significant difference for small businesses, which often have tight margins and can’t afford to carry debt.
When you have an invoice finance agreement in place, managing your debt becomes much easier. Using invoice finance lightens the load by providing you with funding against your invoices. This means that you don’t have to worry about chasing up late payments or managing your cash flow on a day-to-day basis.
Invoice finance benefits include:
- Access to cash without the business having to sell inventory or other assets.
- Far more flexibility than traditional borrowing – providing finance that grows as you do.
- A straightforward application process. Invoice factoring with a Partnership 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.
- Access to the value of invoices before they are paid; typically, within 48 hours of raising them.
- You to decide to either have your whole turnover funded or choose which invoices your business would like to factor.
How can Invoice Partnership Help?
Invoice finance is a flexible agreement, and a reliable way to get funding against your invoices. It will help improve your cash flow and make managing your debt a walk in the park. If you’re a small business owner struggling with debt, don’t hesitate to contact us. We’re here to help you grow your business and succeed. Contact us today to learn more about how we can help you manage your debt and improve your cash flow.