Small and new businesses have had a challenging year. Yet, even in normal times, these businesses can struggle with late paying and defaulting customers. Leaving them with cash flow gaps and numerous unpaid invoices.
Invoice financing can help business get the cash they need to keep operating and growing.
What Is Invoice Financing?
Invoice financing allows business to borrow the cash they need against outstanding invoices that suppliers and customers are yet to pay.
Essentially, invoice financing works a bit like a loan. Businesses will partner with an invoice financing firm who will lend them the invoice amount. When the business is paid their invoice, they pay back their invoice financing amount plus an interest percentage.
Invoice financing can be a lifeline for new and small businesses who are struggling with customers who pay late. It can also help businesses that are struggling to obtain additional business credit.
How Invoice Financing Can Help A Business
There are multiple ways that invoice financing can benefit a business. Below we list a few ways in which invoice financing can support business needs.
Immediate Access To Cash
Invoice financing speeds up how quickly a business can access the vital funds they need. It also doesn’t require long-term financial commitments like traditional loans do.
Repayments Only When You Are Paid
Businesses do not need to make repayments on invoice financing util their invoices are paid by their customers.
This provides a level of relief for businesses. Traditional loans would require repayments form the next month in most instances, which would add an additional financial burden for businesses.
Financial Control
When choosing the right invoice financing, businesses are able to choose how much financial support the want and need.
Financial control and only accessing funds they need gives businesses the peace of mind that they are not inadvertently borrowing beyond their means.
Almost Instant Access
Invoice financing does not require a meeting with a business manager or bank to obtain the funds require by a business.
Instead, invoice financing is paid out quickly, usually within hours, and involves minimal paperwork. Saving a business time and getting their funds at pace.
Reduce Late Payment Risk
Late payments and defaulted payments can be make or break for new and small businesses. Invoice financing reduces the risk of late payments immobilising a business.
Invoice financers will do credit checks on your debtor to ensure they are financially sound enough for the repayment. Further eliminating the risk that payment won’t be made.
If your business is struggling with late paying customers and needs an injection of cash fast, consider invoice financing to keep your business afloat.