Invoice finance might be the answer if you are looking for a new way to fund your company. Invoice finance is different from traditional lending because it allows businesses to borrow money using their invoices as collateral. This helps them avoid over-leveraging themselves and will give them more financial flexibility in the future. Read on to learn more about invoice finance costs and why it could benefit your business!

Improve Cash-Flow

Since you will be advancing money against invoices, business owners can receive their payments much faster. The advanced funds are then kept in the company’s bank account for operational expenses or other purposes as needed. This allows businesses to avoid factoring companies that charge high rates and fees to have access to cash sooner than waiting on a customer to pay. In some cases, a business might have enough orders lined up that they can’t afford to wait for their customers’ slow payments before purchasing the items needed from suppliers or manufacturers. This is referred to as accounts payable financing and works similarly, but instead of advancing money against invoices, you are paying off your expenses earlier than you would usually have. This can result in a much-improved cash flow for your business, allowing it to grow and expand more quickly than waiting on its customers before purchasing the needed supplies from suppliers or manufacturers.

Immediate Access to Cash

Through invoice finance, clients can access cash within 24 hours of receiving their invoices. This means that they will be able to pay the necessary bills and continue running their business without having to wait weeks or even months for a traditional loan application process, saving them valuable time and money in the long run! There is no longer process of delaying payments to suppliers as they will be able to complete their work and get paid as soon as possible! You will save on administration fees. Typically, businesses approved for a traditional loan face high administrative costs, which can eat up their profit margins. This is not an issue with invoice finance, as you will only have to pay the funding fee when your client pays back the borrowed amount! You’ll be able to get cash extremely fast.

Reduce the Risk of Late Payments

The invoice finance company will improve the cash flow of your business by providing you with an immediate lump sum payment against a percentage of future sales. This allows companies to increase their turnover as they can now purchase more stock using this extra capital, usually offered at preferential rates. Invoice financing can save businesses thousands in interest payments compared to standard bank loans and overdrafts.

Invoice financing is an excellent option for business owners that want to take advantage of the cash flow benefits but don’t have enough funds available in their company bank account. If you’re looking for an easy way to get access to funding when it’s needed most, invoice finance may be right up your alley. Speak with one of our experts today and see how we can help!