Running a successful business comes with its challenges. As a business owner, you’ll probably be familiar with the challenges of cashflow. How do you keep a business moving and the cash flowing when you’re forced to wait for customers to settle your invoices?
You’re not alone. This is a challenge faced by many businesses of all sizes across most industries. From pubs to restaurants, hotels to retail outlets, many small to medium-sized businesses are often at the mercy of their invoices and when they clear.
The importance of positive cashflow
Positive cashflow is a crucial part of any business. As well as being important for staff wages and general overheads, having cash available when you need it promotes progression, and ensures any opportunities that present themselves are within reach. Negative cashflow stunts growth and can hinder progression dramatically.
Thankfully, there are ways for SMEs to unlock cash much earlier than they would normally. Invoice financing is one of these options.
What is invoice financing and how can it help with my cashflow?
To put it simply, invoice financing is a form of short-term borrowing for businesses like yours. An invoice finance loan gives you the option to borrow money against your outstanding invoices before they are even paid, cutting out that long wait which can often hinder the growth of a successful business.
An invoice financier will effectively purchase that outstanding balance from you, usually up to 80% of its value, with the remaining percentage being returned to you once the customer settles the invoice, minus their fees.
As well as improving your cashflow, accessing cash tied up in outstanding invoices can assist with expansion plans, investment in other areas, or any opportunity that may present itself.
Speed and convenience is key here, too. There’s not much point in unlocking cash tied up in an invoice you’ve sent to a customer if that process itself is lengthy. Invoice financiers work as quickly as they can to free up that money for you. Many aim to complete the process within 24-hours, whilst making the process as hassle-free as possible.
Many lenders who offer this service are discreet, too. This means that they will not disclose to your customer that you’re using the facilities of an invoice financier.
If you have cash coming in but can’t access it when you need to, get in touch and speak with a member of our team who can assist you in unlocking funds to keep you moving.