How can invoice finance help with cash flow?

It’s a common misconception that maintaining cash flow simply means having a constant flow of money coming into your business. Cash flow is much more complicated than this and maintaining a healthy cash flow can be tricky for small businesses when you find yourself neck-deep in a growth spurt and struggling to fund it. Invoice finance is an alternative lending facility that offers flexibility and is often easier to secure for small, relatively new businesses than other forms of finance. In this article, we will discuss three types of cash flow and how invoice finance can help with maintaining a healthy cash flow for your business!

Section 7 of FRS (Financial Reporting Standard) 102 requires a cash flow statement to be prepared using only three cash flow classifications: operating, investing, and financing.

  • Operating cash flow is what you generate from your normal business activities.
  • Investing cash flow comes from the use of debt or equity in the business to fund growth, acquisitions, or investments.
  • Financing cash flows come from loans and other lines of credit that a company takes out to finance its operations.

If you’re struggling with maintaining healthy levels of all three types, then it might be time to consider invoice finance!

 

You choose which invoices to factor … you’re not tied in.

Historically, when you entered into an invoice factoring agreement you had to factor all your invoices, and whilst for many businesses, this is still often the best option, today’s funders are more flexible. You decide which invoices you want to factor, if you don’t need it, you don’t have to use it.

Factoring gives you access to the value of invoices before they are paid – typically within 24 hours of raising them, and alongside this funding your provider will manage every aspect of your credit control, saving you time and money.

Choosing to use the services of an invoice financing company gives you the flexibility to release cash from your invoices straight away, just use the professional outsourced credit control or indeed a combination of the two.

Invoice finance is now a recognised tool that small-medium businesses use to manage their cash flow, grow their business, and outsource their credit control.

If you need a flexible line of credit to help manage cash flow, then invoice finance is a real, and viable option for your business; it’s secure and safe. 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 plus access to your cash when you need it.

 

Why should you appoint Partnership Invoice Finance?

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, £750,000. We are a secure, stable, and reputable lender offering 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.

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 lending experts who understand the need for discretion and efficiency.

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 security and the comfort of knowing this vitally important aspect of running a business is taken care of – one less thing to worry about.

Please get in touch with us to find out how we can assist you with maintaining your cash control.