Choosing the right funding option…
Are you a small or start up business looking for financing to get things off the ground? Need financing for much needed growth and expansion? Invoice finance could be a great solution for your cash flow needs!
There are many funding options out there available for your business, but which one is the right option? By explaining the process of invoice financing, along with the benefits, we aim to have you understand the best funding option for your requirements.
We firmly believe that it is an injustice for hard-working businesses to have to waste much needed time seeking out funding information and education and having to choose the right lender on top of conducting day to day business. That’s where we come in. As your trusted bespoke, case-by-case broker, we can take out the hard work of you searching for a lender. We can also save you time researching confusing finance terminology! We’ve got you covered.
What is Invoice Financing?
Invoice finance (also known as ‘accounts receivable financing or ‘receivables financing’, or ‘IF’) can be described as a flexible and cost-effective alternative to bank loans and overdrafts for start-ups and other fledgling businesses. Your business gets instant access to the cash flow it needs to grow without you having to worry about exorbitant interest rates or inflexible long term repayment schemes.
Simple: funds are drawn against invoices as they are raised, rather than when you receive payments.
IF is a way that businesses can borrow money against amounts due from customers, using this funding option helps the improvement of cash flow, to pay suppliers and employees, and reinvest in growth and operations. This type of funding allows the client access to funds earlier than if they were to wait for customers to pay balances in full.
Invoice financing can also solve problems associated with customers taking a long time to pay as well as difficulties obtaining other types of business credit.
Invoice finance is the ideal solution for growing businesses as the available finance facilities grow in line with your turnover. The more money you make, the more funds you’re able to release. So, any time you need to invest in new stock, equipment, assets or marketing, you’ll always have ready access to the cash you need!
Broadly speaking, there are five main types of invoice finance that we here at GCF offer:
A financial transaction in which your business sells its accounts receivable to a third party at a discount as a means of meeting your present and immediate cash needs.
Confidential Invoice Discounting (CID) –
A solution for those who already have a solid financial system in place, invoice discounting provides working capital against your invoices without the need for a lender to operate your credit control.
Stands for Customer Handles their Own Credit Control. This option is perfect if you have strong relationships with your customers and you want to keep things this way.
Payroll Finance –
This facility is specifically designed for recruitment companies who place either temporary and/or permanent staff. Cash can be released while paying temporary staff and credit control can be handled while maintaining payments to HMRC.
Trade Finance –
Any UK importers who require upfront funding against secured orders can make use of our trade finance service in conjunction with any other invoice finance facility.
No matter how long you’ve been trading, and no matter what sector you’re operating in, our invoice finance services can give you fast, flexible, and secure access to the cash you need to grow. Click here to learn more. Invoice financing can help transform your business from times of financial uncertainty to being secure, prosperous, and stable.
You can read our case studies with client’s Invoice Finance success stories here.