7 Ways Invoice Discounting Could Help Grow Your Business
Invoice discounting isn’t just a good funding option for businesses that are facing cashflow problems. It is also a valid way of financing growth. Whether your business is at the startup stage or you’re looking to take an established and successful business to the next level, invoice discounting could be a flexible and competitively priced option for you.
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Here are some ways that the right invoice discounting arrangement could help you grow your business:
1. Funding growth with an injection of working capital
When you set up an invoice discounting facility, a percentage (up to 90%) of the value of your unpaid invoices will be converted into cash, providing you with an injection of capital. This can be used in whichever way is most appropriate to fund the growth of your business.
2. Enabling you to offer more competitive terms to new customers
Having an invoice discounting facility enables you to offer improved terms of trade with confidence, giving you more power to win new customers.
3. Improving your profit margins
Invoice discounting releases cash tied up in invoices, giving you the buying power to negotiate better deals with your suppliers.
4. Enabling you to take opportunities
Being able to access funds quickly means you can take advantage of business opportunities as and when they arise.
5. Providing a line of credit that grows with you
Unlike a bank overdraft, invoice discounting provides a line of credit that automatically increases as your sales increase and the value of your customer invoices grows. There’s no need to renegotiate, as you would have to do with a bank overdraft.
6. Freeing up your time and energy
Knowing you have funds available when you need them takes a lot of pressure off. Instead of spending your time fire-fighting, you and your employees are free to focus on making and meeting goals for the growth of your business.
7. Improving the reputation of your business
Invoice discounting makes it possible to pay suppliers promptly, which in turn can enable you to fulfil customer orders more efficiently. On every level, you’ll be earning a reputation as a company worth doing business with.
Is your business eligible to use invoice discounting?
More than 50,000 UK businesses currently use invoice discounting to support their business stability or to finance growth. It’s a particularly popular form of finance in industries such as recruitment, construction, management, wholesalers and printers.
To take advantage of the benefits of invoice discounting, your business would need to:
- Have a projected annual turnover of £50,000 or more
- Provide services or goods to other businesses in the UK
- Issue credit terms of 30-90 days
The way your company is structured does not affect your eligibility for invoice discounting; limited companies, partnerships and sole traders are all able to use the facility.
How to choose the right invoice discounting provider for your growing business
To find the right provider, you need to compare different invoice discounting products and services, in detail. It’s a painstaking process.
Fortunately, you can have an experienced broker such as Touch Financial do it for you. As a leading independent invoice discounting broker, we compare all the products available from a panel of over 20 invoice discounting service providers. This means you can:
- Avoid spending time wading through many different quotes and small print
- Save money by putting our experience, industry knowledge and impartiality to work on your behalf
- Get access to some deals that are exclusively available through us
- Get access to exclusive trial deals, for example ‘try before you commit’ offers from selected providers
We can quickly identify the invoice discounting provider most suited to supporting your business growth – in fact we would expect to introduce you to them on the same day as you asked for our assistance. And we don’t charge you a penny.
Compare invoice discounting quotes instantly online >>
Also in this section:
- Confidential invoice discounting explained
- Benefits of using an invoice discounting broker
- The advantages of using an independent factoring broker
- 7 ways invoice discounting could help grow your business
- Discounting invoices in action
