Invoice finance is a form of funding that can really help businesses in a number of ways. It’s different to traditional lending options from the banks and as such can be used to target specific problems that many small and medium businesses encounter. But how can invoice finance help your business?
Invoice factoring allows you to borrow cash against the value of your invoices. This means you can get an injection of working capital into your business, releasing the money that would otherwise be tied up in unpaid invoices. It’s a good solution to late payment and cash flow issues, but there are many more advantages to be found too.
- Factoring and invoice discounting inject a lump sump of capital into your business finances. You can immediately turn this capital into a working asset such as a new business van which can help you to build up business capacity, or solve problems with an old unreliable vehicle. This of course can be transferred to any sort of useful business equipment that needs a sizeable sum to purchase.
- Invoice finance can also help businesses to expand their team. If your business is stretched and needs more hands then this could increase your turnover – invoice finance helps you to get hold of the cash to pay them straight away.
- Invoice finance can help free worries of tight cash flow and make your business more productive. With more room to manoeuvre, you can stop worrying about staying afloat and start planning for the future.
- The injection of working capital also allows businesses to undertake new projects such as a renewed marketing drive. Finding cash for a serious and sustained drive for new business can be hard, but invoice finance could help make this a possibility.