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What are the advantages of invoice finance?

Invoice finance could come in handy for a huge number of reasons. If your business issues payment invoices on 30, 60 or 90 day terms then it’s worth being up to date on the advantages of invoice factoring and discounting.

- Invoice finance is a flexible and versatile form of finance and can be used to fund any number of needs. There are also no barriers to funding levels as these will increase as the amount borrowed grows with your increasing turnover; bigger invoices mean more can be borrowed.

- Unlike banks who demand long financial histories, invoice finance is based on current business performance rather than how you’ve done in the past. If you’re a start up business this makes it particularly suitable; you won’t have a financial history to draw on and as such banks could see you as risky. With invoice finance, on the other hand, as soon as you start making sales you could be eligible.

- Bank lending is a long and complicated process and the applications alone will eat up much of your time. Invoice finance can make up to 90% of the invoice value available to you within 24 hours of you raising the invoice. This makes it a hassle free way to get extra funding and can be used to fill emergency short falls as well.

- Invoice finance lenders can help to take the strain of payment collection off your shoulders. Though invoice discounting lets you remain in control of collection (and is thus suited to medium sized companies) factoring passes over the responsibility to the lender. This can include collection, chasing customers, and sending statements – a complete credit control system.

If your business is in need of extra funding then it’s worth considering invoice finance. It might not be the most well known of solutions, but it has been backed by experts to play a big role in helping the UK’s small businesses grow and recover.

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