There’s is no good reason for a business to suffer from a lack of cash flow, or be plagued by lengthy invoice terms and late payments. But, if you’re not aware of the alternative funding you could access, don’t see your outstanding invoices as an unavoidable burden on your cash flow. Solutions such as Invoice Factoring can help you to avoid cash flow shortfalls and be used to unlock funding.
If you have reliable customers who pay their invoices by the end of your invoice period, but you find yourself unable to keep up with new work because of a cash flow shortage, then Invoice Factoring can provide a helping hand. Simply, Invoice Factoring can help you to smooth out peaks and dips in cash flow, grow and take advantage of new business opportunities.
Although there are other ways you can raise money, like a business loan or finding an investor, these tend to be slower to access for small businesses in need of a fast solution to move forward. Invoice Factoring is a great way for smaller businesses to inject cash and improve cash flow within a very short period of time. If you need a flexible and fast source of money and also want to avoid the hassle of the administration work associated with processing and collecting unpaid invoices, Invoice Factoring is an ideal solution.
No matter how small or big your businesses is, how you manage your cash goes a long way in determining how successful you’ll be. Invoice Factoring for small businesses is a straightforward financial solution. As an example, your customer might not pay their invoice for 30, 60 or 90 days, but you need the funds in a matter of weeks to pay for business expenses and salaries. You could try and get a business loan or try to find an investor to cover this shortfall, but the process can be time-consuming and might need you to secure your assets or some form of guarantee in order to qualify.
This is where Factoring and Invoice Discounting can help you, allowing your business to unlock funds from unpaid invoices in return for a cash advance. The advance usually equates to around 90% of the invoice value which you receive within 24 hours of factoring your invoice. The remaining value of your invoice is paid to you minus fees once it has been collected. The biggest difference between them being who collects the customer payments
If you’re unsure which option fits you best, then let us help you to decide.
Factoring is an attractive option for smaller businesses who do not have a financial team, because payment collections are one less thing to worry about. With a dedicated accounts receivable team who collects your outstanding invoices, your time is freed up to concentrate on the day-to-day running of your business.
Invoice Discounting is similar to Factoring, in that it gives you access to cash as you issue new invoices. However, the key difference is that you’re responsible for collecting payments, while your use of an Invoice Finance product will be kept completely confidential from your customers.
The positive benefits of Invoice Factoring can help your business to:
- Quickly increase your cash flow, without waiting for payments from customers.
- Reduce the impact of late payments.
- Alleviate administrative demands on your business with an outsources accounts receivable service.
- Pay supplier invoices quicker and take advantage of early payment discounts.
- Increase your level of funding as your sales revenue grows.
- Grow by taking advantage of new opportunities.
- Make much-needed purchases.
- Secure assurance over invoice payments.
Don’t just take our word for it, see what our clients think of Invoice Finance. Matthew MacDonald, President and CEO, Bump Creative required cash to grow the business and realize their potential:
“What I appreciated the most was Bibby's view of lending as more of a partnership. They worked with us to ensure that our company had the capital it needed to grow. It was a great solution for us, as our growth trajectory was high and we needed a financing partner that could handle the growth and help us to stay competitive. Their team worked hard to assist us in achieving our goals.”
Click here to read the full client testimonial from Bump Creative.
Invoice Factoring can be a lifeline for smaller businesses as a way of being paid much quicker and maximizing cash flow and growth opportunities. So, don’t wait until your cash flow flatlines or put your plans on hold, use invoice factoring to speed up your payments and focus on new jobs with the peace of mind that you have the funds in place to support your business. Watch the video on Invoice Factoring here.
For more detailed information, call us at (866) 502-4229 or get a quote so one of our business finance experts can help you directly.