Cash flow is one of the big issues that many small and medium sized businesses struggle to deal with. Looking for a targeted finance solution is one way that businesses can ease cash flow pressures without needing to rely on the banks. Successful business management often relies upon the careful management of cash so it’s worth making sure your cash flow is healthy. This is something that invoice finance can help with.
Invoice finance is a valuable option, whether you use it as a long term plan or to alleviate short term cash flow problems created by unexpected expenses. Even if your sale book is full of orders, if customers aren’t paying, then you’ll be tight on cash. Instead of sitting on unpaid invoices and failing to get paid, you can instead use your sales ledger as a way to unlock working capital in order to help your business breathe easier.
If the gap between issuing invoices and customer payment is simply too long then invoice finance can help to bridge the gap. An invoice factoring lender can release up to 90% of an invoice’s value often within 24 hours of issuing, so you can get access to the funds you’re owed by lending against the value of your invoices – you’re not taking on any new debt, making this a good way to ease cash flow issues without some of the drawbacks of traditional lending. What’s more, the more your business grows, the more cash you can release through invoice finance – it grows with your company, which is one thing that traditional lending can’t offer as standard.
Many businesses in the manufacturing, recruitment and haulage sectors use invoice finance, however, any business which sells on credit to customers through invoices could be eligible to use the service. If your business needs a flexible, accessible way to raise working capital, then invoice finance could be worth a bit of research – especially if you need to deal with cash flow problems.