How do you know if invoice finance is the right choice for your business? Its becoming a ever increasingly popular way for small businesses to unlock cash flow, so it’s worth knowing when you should start to think about it. We’re taking a look at a few of the most common circumstances which could benefit from factoring services.
Is your business in need of a quick cash injection?
This is one of the classic scenarios when invoice finance could help. 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 are late on their payment, you can use this service to get access to your funds.
Do you need to improve your cash flow?
Again, this is one of the most common reasons for businesses to use factoring. There can be no growth without cash, but equally there can be no cash without growth – this is the classic dilemma, and one that invoice factoring can solve. 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.
Do you want short term financing with long term gains?
Invoice factoring limits your debt as you’re simply borrowing against your own future payment. This means you’re receiving an advance on funds you’re already owed, not taking on new debt. You can also use it on a long term basis or for short term funds – 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.
These are just a few of the most common advantages from using invoice finance – could your business benefit?