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Why Businesses use Invoice Finance

Thousands of businesses in the UK are using invoice factoring solutions to help their business, but a lot of other businesses are still unaware of what the funding brings. There are many reasons why companies choose invoice factoring as their funding solution, here are a couple:

  • Builds a bridge between the cashflow gap of paying suppliers and getting paid.
  • More flexible than overdrafts and bank loans.
  • Improves your cash position to help your secure supplier discounts.


Here are some of the businesses that might benefit from invoice factoring solutions, would your business benefit too?


Fast Growing Businesses

Growth is any exciting time for any business, although it does come with some challenges when trading. You need a steady cashflow to be able to grow, which means you will need to purchase more materials from suppliers or employ more staff to be able to keep up with the business’ growth.

Instead of waiting up to 90 days or more for payments from your customers, an invoice factoring facility will be able to release up to 90% of an invoice’s value within 24 hours of its issue. No matter how many invoices you are raising a month, your cashflow will continue to flow so your business can grow.


New Businesses

If you’re a new business, then invoice factoring might be an ideal solution to help you get started. Start-up businesses will lack a credit history, cash flow statements or balance sheets which could make it difficult to qualify for a bank loan, but with invoice factoring it is secured against your customers credit history.


Seasonal Businesses

You might find it challenging to manage your cashflow throughout the rest of the year if you are a seasonal business.

Invoice Factoring is flexible, allowing you to access working capital when you need the money the most, whether that’s during a busy period of business to meet the demand or to manage cashflow during the slower periods.


Small Businesses

A lot of smaller businesses lack the essential internal resources to dedicate to credit control that will benefit from other services that invoice factoring can provide. Invoice Factoring can also reduce in-house overheads, improve collection times and protect against late payments, whilst boosting cashflow.

Added: 16 May 2019 11:00

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