When you're a small business, it's tough to keep up with the bills while you're…
How Small Business Owners Can Use Invoice Financing to Thrive
Most small business owners will be familiar with the challenges of getting paid on time. If that’s the case for you, then you’ve probably already explored payment terms with your clients and suppliers. However, there is another option open to you to help manage this problem: invoice finance. Invoice debtor finance is a great way to get access to cash when you need it most, and it can be used by both large and small businesses alike. What’s more, invoice financing gives you access to money in as little as 48 hours which means that if an invoice hasn’t been paid within this time period, then it’s returned back into your account – allowing you complete control over when and how much money is released from your accounts.
What is invoice debtor finance?
Invoice debtor finance is a way for small and medium-sized businesses to get funding for their working capital. You can use it to fund your business or buy stock or equipment. It’s a form of factoring, which means that you sell the invoices you owe money on to an invoice financier in exchange for cash upfront. This can be really useful if:
You need more money in the short term than what’s in the bank but don’t want to sell shares or assets
Your customers are slow paying – maybe they’re going through financial difficulties themselves
You have some spare capacity at work and want to take advantage of it
Why should you use invoice debtor finance?
Let’s have a look at some reasons why invoice debtor finance can help your small business thrive:
It can help you grow your business. As your customer base grows, so will the amount of money you need to spend on stock, equipment and marketing. Using invoice debtor finance means that you don’t have to worry about finding extra cash for this – as long as there are enough invoices coming in each month, your line of credit will be open for any purchases that may come up.
It can help expand your customer base. The more customers you have (and the better quality they are), the more efficient and profitable your small business is likely to become over time. This means that invoicing works hand-in-hand with keeping track of expenses (which we talked about earlier). If customers know they can trust that they will be paid on time when doing business with you, then they’re more likely to order from them again in future!
Where can you access it?
Let’s say you’re a business owner, and you need some working capital. You could try to borrow the money from a bank, but in many cases, it might be easier to get it from another company that specializes in lending to small businesses. Invoice financing is a great way for businesses to access capital when they need it most: when they have an outstanding invoice that needs funding immediately.
This type of funding typically involves borrowing against an invoice or group of invoices provided by your customer. It can be used as either short-term or long-term financing, depending on what your business needs at any given time. The funds become available quickly and are distributed directly from the invoice lender into your bank account—no messy paperwork is required!
At the end of the day, invoice finance can help your small business thrive. It’s a great way for you to grow and expand your customer base by making it easier for them to pay their invoices on time. And since we offer flexible financing options with no prepayment penalties or collateral required, this is an option worth looking into more closely.