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Invoice Finance: Short and Long Term

If your business is thinking about finance options, then it’s worth doing your research. While traditional options such as bank loans and overdrafts might be your first port of call, you could be missing out by limiting your search. Alternative finance options such as factoring and invoice discounting are targeted ways of improving cash flow, dealing with late payment and giving your business a lump of working capital which an be useful for growth and investment. So, how exactly does invoice finance benefit small businesses?

The first and most immediate benefit of factoring is improved cash flow. If your cash flow is tight, you’ll not only find it hard to grow your business, but day to day survival will also be a bit of a struggle. Injecting fresh funding into your business by unlocking the unpaid value of your invoices is a credit solution that not only boosts your day to day cash flow but can also grow with your business – the more invoices you have to factor, the more funding you can access.

This brings us to the long term benefits of factoring as a cash flow solution. It means you can grow your business not only in terms of the short and medium term, but you can start to plan for the future and invest in new staff, new equipment or a new marketing drive. By sorting your day to day cash flow, you can alleviate some of the worry of day to day survival and operate in the knowledge that your business will be there the fight another day, year or month – and you can start to plan ahead to make the most of your opportunities.

There are many benefits of invoice finance, ones which take you beyond the traditional up sides of bank lending options. If your business is in need of a cash flow injection then factoring or invoice discounting could help.


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