Who Can Use Invoice Finance?
Invoice finance has become rather popular in the past few years, due to businesses needing to raise instant capital. Using invoice finance can provide your business with instant cash just by providing them with your unpaid invoices.
So when you are using invoice finance you are basically selling your unpaid invoices to the company for a percentage of their value. You will usually receive around 85% of the total. It is then down to the invoice finance company to collect these payments.
There are certain requirements when it comes to using invoice finance. If your business has a turn over of over £50,000 and has good credit control procedures in place, you will more than likely be approved for invoice finance, compared to a new business. They are seen as a risk due to them having no trading history, although some companies will accept new businesses. It all depends on how they work.
Put Invoice Finance to Good Use
Coming up with ideas on how to start a business or to help a current one grow is easy compared to accumulating the finances to put these ideas into motion. There are many things that can get in the way of your business receiving finances.
There is an option out there for companies that is quick and simple, this is invoice finance. Invoice finance works by you as a business selling your outstanding invoices to them. The money owed on these invoices can be transferred to you in as little as 24 hours. Once all the money if received the invoice finance company will take their fee and then transfer you any money left over.
Using invoice finance allows you to carry on in business the way you have been. It enables you to pay bills, buy new stock or pay wages, whatever the money is needed for invoice finance provides it.
Helping out Your Business when Its Needed
No matter what anyone says money is what keeps your business alive. If there is no money coming in to your business it is clear that your business will end up closing. The business world is becoming more and more competitive, so it's getting harder for smaller businesses to stand out and make their mark. Small businesses are the ones who are going to struggle the most when it comes money and finances.
Invoice finance is a great way to get the funding that you need for your business. Moat of the time businesses money will be tied up in invoices. Most clients will expect between 30 and 60 days to be able to pay their invoices. You should consider your invoices an asset and not a liability.
The invoice finance company will purchase the invoices off your company for a percentage of the total value. You will normally receive up to 80% of the total.
Help Secure the Finances You Need
The businesses that struggle the most are the ones that are just starting out. It's hard to get on your feet and get your business running smoothly. Some business men will wait years before they start out because they want to make sure everything is right, but others don't have that time to wait. In business you need money for many things you have bills to pay, wages to pay, stock to buy and much more.
Some businessmen believe, as they believe that they will be able to pay their bills by completing their jobs and billing their clients. But it doesn't work like that because most clients will expect between 30 and 60 days to pay off their outstanding bill. You can apply for invoice finance if you need money. This works by you sell you invoices to them for around 80% of the total invoices. They will then collect the money owed on your behalf.
How to Overcome Financial Problems with Invoice Finance
People find it very easy to come up with new business ideas, but to find ways of funding this business is the hard part. There are many different problems that you could incur when trying to apply for funding for your new business.
Invoice finance is an alternative for businesses instead of going to a high street banks.
Invoice finance works by business owners applying for a loan against their outstanding invoices. You can receive the money within 24 hours of applying with this type of loan.
Here are some of the problems you overcome with invoice finance: One of the most common problems people come across is their credit rating. If your business has only been established for a couple of years your credit rating won't be at a rate that banks are willing to lend to. Being approved for a loan with invoice finance doesn't depend solely on your credit rating.
Another problem is the length of time it can take for a loan to be approved by banks. Your business might need funding straight away so this wouldn't work for you.
If your business needs funding please don't look past invoice finance.
Invoice finance is growing non-stop within businesses. It improves your businesses cash flow and also takes away the hassle and time of chasing your clients for their payments. Most business can apply for invoice finance, but not all of them will be approved. So what makes you eligible for invoice finance?
They are the same as banks as all invoice finance companies will vary and have their own ways of working. An invoice finance company will look at you as a business and see if you are a risk to work with or not. A lot of invoice finance companies will not lend to retailers. You must have at least £50,000 annual sales to be considered. There are invoice finance companies out there that will lend to you if you are a smaller company or just starting out. If you are a small company or starting out you much have at least a certain amount of clients.