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The Benefits of Invoice Finance for Start-ups

Finding the right funding is critical for start-ups as they bid to get off the ground and keep the cash flowing whilst they are establishing their business.

As a specialist finance broker, we aim to help businesses to find their right funding match-including start-ups. Whilst invoice is ideal for many companies, it’s even more ideal for companies that are at the end of the spectrum – with many of its benefits solving some of the most common challenges a growing company may have to face.

Similarly, for a lot of largely growing businesses, invoice finance can provide a scalable and flexible funding solution that can see them grow from the early start-up stage and establish themselves as a financially stable and a fast-growing SME.

Invoice factoring provides companies with dedicated sales ledger management. This can release the burden of customers’ invoices. The difference between factoring and invoice discounting is that your company retains the task of managing your sales when you chose invoice discounting. This could be beneficial if you want to maintain touch points with your customers to build stronger relationships with them. However, this is usually just available for established businesses with a turnover of more than one million.

Spot factoring allows businesses to access up to 90% of individual invoices as opposed to their sales ledger. This then gives you more flexibility and it also means that you won’t be tied into a long-term funding facility but can still boost your cashflow when needed.

There are many reasons as to why invoice finance can be a great choice for recent start-ups.

Improving your cashflow and ensuring you have more liquid cash means that you’ll have not only the funds you need for day-to-day operations, but you’ll also be able to invest in growth. You may want to expand your team, develop a new solution or take on new clients. With invoice finance there are no limitations to what you spend your released cash on. Invoice finance also a level of scalability that you don’t always get with other funding solutions. For example, overdrafts and loans as it will grow alongside your sales ledger.


Added: 20 Sep 2019 14:29

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