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Why Businesses Are Using Alternative Funding

For a growing business, it’s important to make sure that operations are running smoothly. Therefore, keeping your cash flow in order is a key priority. There are now alternative funding methods which businesses can access to help ease cash flow pressures and bring finances under control.


We are now going to be looking at why businesses are increasingly turning to alternative funding options, providing an insight into a key player - invoice finance.


Traditional lenders have become strict to business funding since the 2008 financial crisis. Start-up businesses are looked upon as a larger risk investment compared to larger companies.


Alternative finance providers have looked to fill the gap in the past decade. They provide a flexible range of cash flow solutions to cater for every type of business and specific industry needs.


Invoice Finance Solutions:


A popular and effective alternative is invoice finance. There has been a boom in this across UK and Irish businesses since the credit crunch. This shows evidently as Invoice Finance has increased by £8 billion in the past decade.


With Invoice Finance, you are provided with advanced security against your unpaid customer invoices. This means you get quick access to cash flow, meaning you won’t be waiting the usual 30-120 days for your customers to pay.


How it Works:


  1. You provide the goods/services to your client and invoice them
  2. The invoice details then get sent to the invoice finance provider
  3. The invoice finance provider gives you a certain percentage of the face value invoice
  4. Your own credit controller or the invoice finance provider’s sales ledger service will carry out the invoice collection procedure.
  5. After your debtor pays, the balance of the invoice is made available to you – less a service fee.


This type of funding will scale your business growth and provide you with a simple measure of keeping your cash flow levels healthy and consistent.

Added: 06 Oct 2017 15:03

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