Invoice finance is becoming a more popular option for increased cash flow, with more and more small businesses taking advantage of this flexible form of business finance. However, research has shown that many businesses are still in the dark about how to use factoring and invoice discounting to their benefit. So, how do you know if invoice finance could be for you? We’re taking a look at a few of the most common circumstances which could benefit from factoring services.
Your business needs a quick cash injection
This is a common time when invoice finance could help you. Factoring and invoice discounting can release up to 90% of the value of an invoice within 24 hours. If you need cash quickly and have customers who haven’t paid, you can use this service to get access to funds that might otherwise be out of reach until they do. A factoring lender can make funds available far quicker than you’d otherwise be able to access them.
You need to improve your cash flow
Cash flow is the lifeblood of any business; we all know there can be no growth without cash, but equally there can be no cash without growth. Solving this catch 22 situation is where invoice finance can step in. Invoice finance unlocks cash that is tied up in unpaid invoices which can be a big problem if you’re suffering from late payment, which can strangle any business.
You want short term financing with long term gains.
Invoice factoring limits your debt as you’re simply borrowing against your own future payment. Invoice finance simply means your receiving an advance on funds you’re already owed, plus a small lending fee. You can also use it on a long term basis or for short term funds, making it flexible for any situation. Long term gains include increased turnover, better growth prospects and improved cash, flow, whereas short term you can ease your day to day cash worries.
There are many more advantages to using invoice finance, so if it sounds like something that that could benefit your business a bit of research could open up all sorts of new financial avenues.