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Do you need invoice finance?

Alternative finance is becoming all the more main stream. More and more companies are turning to invoice finance as a way to deal with all sorts of financing problems. However, awareness amongst the wider business community is still a bit lacking – so when should you start thinking about factoring and invoice discounting services?

You should start thinking about invoice finance if:

You need a quick cash injection into your business.

With factoring and invoice discounting services, you can release up to 90% of the value of an invoice within 24 hours. If you need cash quickly and have a mountain of unpaid invoices, you can use this service to get access to funds that might otherwise be out of reach until your customer decides to pay. A factoring lender can make funds available far quicker than you’d otherwise be able to access them.

Your cash flow needs to be improved. 

There can be no growth without cash, but equally there can be no cash without growth. As such, cash flow is the lifeblood of any business, small, medium or large. Invoice finance can unlock cash that is tied up in unpaid invoices. Late payment can tie up funds for months, and cash flow can become tight. This is where invoice factoring can help.

You want short term financing with long term gains.

Invoice discounting and factoring mean you don’t need to commit to long term interest on loans or overdrafts. Invoice finance simply means your receiving an advance on funds you’re already owed, plus a small lending fee. Long term gains include increased turnover, better growth prospects and improved cash flow, and in the shot term you can ease your day to day finance worries.

  • Don’t have an established credit control process?

If your company is a new start up or just short on resources, your credit control process can suffer. Factoring lets you pass off your credit control to your lender, who will chase up payments on your behalf, taking the strain away from your busy day to day.

Or, do you have an established credit control process?

If so, and you’re a medium sized business, then invoice discounting could be for you. This lets you remain in control of your credit control which is especially useful if you want to be discrete about your use of invoice finance.

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