News Article

Factoring & Invoice Discounting

The Importance of Invoice Finance

By Lily Hale Thursday, April 4, 2019

Ask a room full of business owners which one element of commercial operations is most harmful for their cashflow and late payments will top of the list. How bad is the issue? The latest figures show that the UK’s small businesses face a price of £6.7 billion just to collect money they’re already owed, with the cost of recovering overdue cash now at an average of £9,000 for each business. This is up almost 158% on 2017 figures and, more worryingly, a third of SMEs are relying on overdrafts to help them meet monthly obligations.

This is where Invoice Finance enters the fray, providing a solution to the late payment conundrum that so many SMEs struggle to overcome. Instead of having to wait 30, 60 or even 90 days for payment, this facility allows companies to gain access to money they’re owed, from their outstanding sales ledger, to accelerate cashflow and increase working capital simultaneously.

Once a facility is in place, a client will be advanced a significant percentage of the money they are owed within 24 hours (often up to 90%). So, instead of having to plan around a gap in finances, businesses will gain access to much needed cash almost instantly. As part of an Invoice Finance facility, we can also chase debtors on our clients’ behalf, further removing the burden of late payments.

For more information on our Invoice Finance facility, click the link below to watch our video that tells you all you need to know.