What is Invoice Financing?

We are all familiar with the term “Cash is King”. What does it mean from a business perspective? Cash flow (the inflow and outflow of cash) for businesses is like the lifeblood of your business – a business can be very profitable, but without cash coming in, it risks dying. By forecasting cash flows in advance, action can be taken to deal with foreseeable gaps. But even good businesses can suffer from unexpected problems such as:

  • A debtor suddenly delaying a payment
  • Unexpected large bills
  • Weather or health events interrupting business operations

There are also business opportunities which may need a cash flow adjustment:

  • Starting a new contract requiring upfront cash prior to receiving payment
  • A supplier offers a discount for early account settlement
  • Investing in a new product or service before your competitors do.

The ability for your business to have access to cash could mean the difference between growth and success, or problems and stress. Invoice finance is a perfect tool for accessing cash quickly. Often, a business’s debtor book is one of their biggest assets – invoice financing unlocks the value of your debtor book so that your business receives cash before an invoice is due to be paid. In simple terms, invoice financing allows you to “sell” and invoice to your financer, thus receiving cash for the invoice immediately. But beware – not all invoice financing facilities are the same, and not all financiers provide a solution to fit your needs. Invoice financing is like a catalyst – when used correctly it can accelerate the growth of your business. If you have the wrong type of invoice finance facility your business could suffer from unnecessarily reduced income, and loss of opportunity.

When searching for a cash flow solution for your business, you need to consider a number of factors such as:

  • Expected time frame for needing the finance
  • How much of your debtor book do you need financed?
  • Does the financier require any other securities (such as property)?
  • What level of service would you like to receive (would you like direct access to your financier 24/7)?

Capitalise Business Finance’s debtor finance facility offers the following features:

  • No lock-in contract
  • No hidden fees
  • Single invoice, single debtor (or multiples if required)
  • No property security required
  • We are happy to work with new businesses
  • Personalised service with direct access to us

Many businesses will find that our product is not only more cost effective than our competitors, but also much easier to use than a full-service facility, particularly when considering that the business can “pick and choose” which invoices to finance and when. We work in partnership with our clients to create tailor-made solutions that meet their business cash flow needs both now, and into the future.

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