Do you know the advantages of invoice finance that your business could be enjoying? With late payment problems a big issue for many companies, as well as economic woes and tight business regulations, it could be worth your while to get up to speed.
1) Invoice finance is flexible. There are no restrictions on how much funding you can gain access to, it’s all down to the size of your invoices.
2) You can increase your invoice finance funding as your business turnover increases. Invoice finance grows in line with your business – the bigger your sales, the more funding you can access.
3) Funding is calculated according to current business performance rather than based on historical financial information. This means you don’t need the detailed financial history as demanded by the banks for traditional loans and overdrafts.
4) Invoice finance is suitable for start up businesses. It’s flexible and isn’t reliant on years of financial records, ideal for businesses that are just getting up and running. As soon as you’ve got a few sales on your books, you can start factoring invoices.
5) Funding is secured on business assets, meaning you won’t need personal security.
6) Invoice finance won’t interfere with your everyday running. You will be producing goods or running services as normal, issuing your invoices to clients. These details are then passed onto the factoring lender, who will release the funds within 24 hours.
7) You can access up to 90% of the invoice value within 24 hours, with the remaining 10% released once the customer has cleared their debt, minus a small lending fee.
Factoring allows you to pass the responsibility of collecting invoice payment to your factoring lender. This is ideal for companies without a dedicated finance department who need a bit of help with their invoicing procedure.
9) Invoice discounting, on the other hand, is better for medium sized companies who want to remain in control of their credit collection duties. This means invoice finance can be as discrete as you want – customers won’t know a thing!