Invoice Finance for Small Business

  • Give your business a quick cash boost
  • Reduce administrative stress
  • Fund business growth

I have a small business, what is invoice finance?

Running a small business can be really rewarding but it’s not without its problems.

Waiting for customers to pay invoices can be especially difficult if you are a small business. Long payment terms can really hold you up when you want to get things moving.

With staff to pay, materials to purchase, and new business to chase, you need a constant stream of available cash.

Get paid within 48hrs of raising an invoice

Release cash today

Small business struggles

  • Cash flow and money management
  • Slow customer payments
  • Low capital
  • High operational costs

Do these struggles sound familiar? Alongside other issues such as high competition, employee turnover, and work/life balance it can sometimes seem like an uphill struggle. Don’t worry…

How does it work?

Once you’ve invoiced your client for the work you’ve done you send them an invoice.

Instead of waiting for your customers to pay, you can sell your invoices to an invoice finance provider.

Within 24-48 hrs the invoice finance provider will give you up to 100% of the invoice value.

The customer will pay their invoice into a trust account.

The provider takes their fees and sends you the rest of the balance.

Types of invoice finance

There are several types of invoice finance that you can consider. Each has been specially designed to meet the needs of all business types.

Want to compare invoice finance options? Check out our handy guide what type of invoice finance is right for me?

What are the benefits of invoice finance for small business?

There are many great benefits of invoice finance for small businesses. Here’s how it could benefit you and your business.

Improved cashflow – By getting cash from your unpaid invoices you can free up capital to use as your business needs. This could be to cover day to day expenses such as wages or utility bills, buy new equipment or materials, or invest in other areas such as marketing and advertising. It’s a flexible way to ensure your business runs smoothly.

Fast cash – You can access your cash in as little as 24-48hrs meaning you get the cash you need fast.

Flexibility – It’s a flexible form of financing that can grow with your business. The funding available increases as your sales and invoices grow, providing a scalable financial solution.

No additional debt – Unlike more traditional lending; it’s a way to leverage existing assets (invoices). This means it doesn’t add debt, which can be a relief for businesses concerned about borrowing.

Easier future planning and budgeting – Predictable cash flow from invoice financing makes it easier to plan and budget for future expenses, investments, and growth.

Safeguard against bad debt – Sometimes your customers may not be able to pay due to insolvency, with invoice finance you can protect yourself against this with protection services.

Grow your business – You can use the cash you free up to help grow your business. Having cash available can allow you to hire more people, invest in larger premises, or chase bigger contracts. By knowing you can access your money quickly you can also strengthen your customer relationships by offering longer payment terms if needed.

Less stress – Knowing that your cash is easily accessible can help elevate a lot of the stress associated with running a small business. If you wish to free up more time and administrative stress, then invoice factoring can be an excellent choice. With a full service like invoice factoring, you can hand over the task of chasing the invoices to the provider. This means you can spend more time on your core business and growth strategies.

Seasonal support – If you’re a business that operates seasonally or sees seasonal fluctuations in cash flow, invoice finance can be a real support during slower periods and ensure you can continue to operate smoothly.

 

How do I qualify for small business invoice finance?

Whether you opt for invoice factoring, invoice discounting or CHOCCS each provider will have their own qualification criteria. But there are some factors they will take into consideration when assessing your eligibility.

Number of invoices – Businesses that generate a reasonable volume of invoices on a regular basis will be eligible for better rates. For more information on fees and costs visit how much does invoice finance cost.

Time in business – Most providers require 12 months trading to be eligible.

Business turnover – For a factoring service most providers will require a minimum of £100,000 turn over a year. A discounting service provider will normally require £250,000 annual turnover.

Creditworthiness of clients – Invoice finance providers will often evaluate the creditworthiness of your clients or customers since they are essentially purchasing your unpaid invoices. Clients with a good track record of paying their bills are more likely to qualify.

 

 

How easy is invoice finance for small businesses to access?

The best way to access invoice finance is through a broker. By using expert guidance, you can be sure you are getting the best deal for your individual needs.

A broker like Touch Financial can put you in touch with the leading providers in the UK. Our experts are helpful and friendly and our service is no obligation.

Let us help your small business onto the path to financial freedom today!

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