5 Reasons Invoice Finance Helps Cash Flow
Cash flow is often a major problem for businesses and in a lot of cases it can be down to late paying clients and unpaid invoices. Apart from going down the traditional route of a bank loan, or an overdraft what can you do to address the problem? Invoice finance UK is a brilliant means of getting a cash injection without too many of the concerns and complications which often come with a standard bank loan.
What is invoice finance
Invoice finance is a general term, which is used when you raise money from a factoring company against the value of your unpaid invoices. The factoring company will advance you money, which tends to be between 70-90% of the value of your unpaid invoices. When the invoice is eventually paid, the factoring company will take what they’re owed along with their fees, before returning the remainder of the balance to you.
So why exactly does invoice finance help with cash flow?
Number 1: Can get the money very quickly
With the majority of factoring companies, a business is able to get a cash injection worth up to 90% of their unpaid invoice. Typically, this can be paid within a day or two issuing invoices. If a business is really struggling with cash flow troubles and need the cash to pay debtors, then it can be a quick and easy solution.
Number 2: Bookkeeping takes care of itself
If you are using a factoring facility, the factoring company will usually manage your ledger, which means they will chase payment and manage your credit control. The factoring company will collect the unpaid invoice and take care of how the cash is repaid and then distributed.
With an invoice discounting facility you retain control of the ledger.
Number 3: Time to work on other things
With bookkeeping effectively taken care of, a business owner who has previously been stressed trying to chase down late payments, will now have the time to put effort into other areas of the business.
Number 4: Invoice Discounting can be used for discretion
If you feel slightly insecure about having a factoring company collect your invoices and believe that it could impact negatively on your business, then invoice discounting may be the answer. Normally, however, this is for larger businesses with well-managed ledgers and established credit control systems in place who prefer suppliers or clients not to know they are using a factoring company.
Number 5: A business only has to make repayments when the money comes
If you were to go down the route of using a traditional bank loan to help solve cash flow problems, then the repayments can be a massive hurdle when it comes to moving the business forward. When it comes to invoice finance, it’s simply not something you have to worry about. The factoring company will take care of repayments, and there aren’t any fixed-term repayments to be made, which is only good for managing cash flow.
Invoice finance UK can be a brilliant way of helping a business get through its cash flow troubles, with the cost of factoring often even cheaper than the interest charged from a bank loan. However, it can only be applicable if a business has invoices which are good enough to be factored.
What can we do for you?
If you think an invoice finance facility would aid your business, either with cashflow troubles or growing and progressing as a company, it’s vital to get the most appropriate deal. Invoice finance can provide an injection of cash to either aid a difficult period or take your business to the next level.
We can help you secure the best invoice finance facility for your business, designed to fit the needs and growth of your business. We are brilliantly positioned to negotiate the right deal for you, working closely with the top blue-chip lenders, we are able to get exclusive rates and deals that otherwise would be unattainable.
Some of the partners we work with...
From a funders perspective, I find that the team at WF Financial Solutions, really take the time to understand the customers’ needs and wants and with their vast experience are able to match them with the correct funders. This really helps the funders to build a fast and trustworthy relationship to ensure any facilities are provided in a timely manner.
- Wayne Spratt, Business Development Manager, Bibby Factors Yorkshire
Why choose us?
WF Financial Solutions is an independent broker of invoice, asset and trade financing solutions with links to lenders of all sizes and specialties. WF Financial Solutions has helped many clients through a range of lenders and their varying services and we are proud to offer advisory and introductory services to finance providers that suit your needs.
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