Invoice Financing

Not having enough working capital is a constant struggle for many startups and small businesses. Business owners often rely on short-term and long-term loans to fulfill their working capital needs. In the long run, it can put your business into debt. Invoice financing can help you gather vital funds without falling into debt.

 Read on to know how invoice financing can help you increase your business cash flow.

What is business invoice financing?

Business invoice financing is a financing option in which you can use your unpaid invoice to get advances from an invoice financing agency. There are two invoice financing options — factoring and discounting. You can use them to avail yourself of money on your outstanding invoices.

How can invoice financing enhance cash flow?

There are various ways invoice financing can enhance your cash flow. These are:

Quick access to cash

One of the significant benefits of invoice financing is that you have easy access to cash. With loans and other borrowings, it takes time to recover the money as there are a lot of approvals you need to get. You don’t have to wait for anything but an unpaid invoice with invoice financing. Due to this, you don’t lose any good business opportunities due to a lack of funds.

Releases tied-up capital

Another significant benefit of invoice financing is it removes the wait time involved with invoices. Usually, invoices have a repayment period of 60 to 90 days before it becomes due. During that duration, your money is stuck with the customer, and there is nothing you can do. You can cut short that period with invoice financing and get funds.

Simple terms of payment

Unlike bank loans and other forms of credit you take to finance your business, the terms of payment for invoice financing are pretty simple. You don’t need to repay the amount until the customer pays you back. Some financing options also cover debt collection, so you don’t have to worry about chasing the invoices. You can simply focus on growing your business.

Zero debt accumulation

Another significant benefit of invoice financing is that it does not accrue debt to your firm. You are simply getting the money the customer owes you at an earlier date for a small price. So your debt to cash ratio isn’t disturbed. Another benefit is getting your invoice financed, even if you don’t have a long-standing credit history. It is not the case with other forms of finances — that’s why invoice financing is beneficial for new and old businesses alike. 

About Ignite Business Group

If you are looking for a reputable and reliable invoice factoring company in the UK, Ignite Business Group Ltd. should be your first choice. With over 25 years of experience in the field, we can take care of all your invoice troubles. You can quickly get your invoices discounted or factored in by providing essential information and invoice copies here. Reach out to us at 01332 896 020 or fill out our online contact form to know more.

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