Invoice Finance for Businesses Supplying to the Healthcare Sector
The healthcare sector is a vital industry, providing essential services to people across the country. However, it can be challenging for businesses within this sector to maintain a stable cash flow, secure necessary funding to grow and expand their operations. Employing the services of an approved invoice finance facility can be the key to freeing up your available cash flow and managing your credit control.
Invoice finance can help businesses supplying to the care sector such as those supplying temporary staff, medical equipment, PPE, and laundry facilities by reducing costs and providing additional finance when needed, you can make sure that your business is best placed to succeed in this competitive industry.
Healthcare Supply Business Operational Pain!
With the Government opening up contracts to independent providers, the care/healthcare industry is exploding. There is, however, a problem. The public sector can be notoriously slow in paying its bills, forcing many of its suppliers to wait 60 days or longer for their local authority to pay off outstanding invoices.
Late payment is a growing problem for SMEs of all kinds, but it seems to be a particularly severe issue in the public sector and certainly for the businesses that are supplying staff, equipment, and services. Recent research found that 90% of care/healthcare sector suppliers are hit by late payments. This in turn creates an enormous problem that can put the future of some of these SMEs at significant risk of going out of business.
This industry sector can be a difficult area in which to do business, with tight margins and often long payment terms and this is where invoice finance comes into play providing an essential cash flow boost, as well as helping with credit control and reducing costs. Any healthcare supply company can benefit from invoice financing.
What is Invoice Finance?
Invoice finance is not a traditional fixed term, fixed amount loan, but rather a dynamic cash flow management system keeping pace with rising sales levels plus credit control at its best. Imagine having the peace of mind that comes from knowing that credit control is in hand ensuring invoices are paid as and when they fall due, and that your cash needs are met in advance of these invoices being settled. Your business can continue without cashflow anxiety, payrolls can be met, stock ordered, new contracts entered into and cash for growth acquired.
Access to your cash when you need it is critical. Invoice finance can help you manage this, and Partnership Invoice Finance can counsel you through it. Invoice finance provides access to the cash tied up in your sales, it is a way for businesses to get money for the goods and services they have supplied and invoiced for before the customer is due to, or has, paid their invoice.
Invoice finance provides access to the cash tied up in your sales, it is a way for businesses to get money for the goods and services they have supplied and invoiced for before the customer is due to, or has, paid their invoice.
If you’re looking for a way to free up cash flow and manage your finances more effectively, invoice finance could be the answer.
Types of Invoice Finance Options Available
Whether you are already running your own healthcare or domiciliary business or simply considering starting up, we can help you find the right type of funding option to help you build your business.
There are two main types of invoice finance.
- Discounting (which can be disclosed or confidential)
Discounting and Factoring are similar, except with Factoring the funder is responsible for your credit control and ensures that invoices are being correctly managed. For both services, the funder provides an advance equal to a 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 (the balance is released once the invoice has been settled in full), but you pay a small fee for use of the facility – like you would on any financial product.
There are typically two charges, a service charge expressed as a percentage of each invoice financed and a discount charge which functions in the same way as interest and is payable monthly based on the amount utilised in the month (in the same way as Bank overdraft interest would work). When your invoices are settled any indebtedness is repaid the balance minus the charges are made available.
Set-up is easier than you might think!
A lot of businesses don’t realise how easy it is to set up an invoice finance facility, so they miss out on this opportunity – but it’s simpler than you might think. Invoice finance providers are also flexible and will collaborate with you to find the best solution for your business needs – so if you’re worried about setting up a facility only to find out it’s not right for you, don’t be!
Supplying to the care/healthcare sector is complex and each business has very different needs. As a result, we work closely with you to understand your business model and your needs to make the financing process as painless as possible and specifically tailored to your company’s needs.
If invoice finance sounds like the answer to help your business, then please contact us.