5 reasons to grow your business with Invoice DiscountingPublished on 26th September 2017 - Last update on 1st February 2018
Does your business sell goods and services on credit? If invoices make up a portion, or even the majority, of your business’ transactions you could be sitting on a potential gold mine, all you need is the key. With Invoice Discounting you could release up to 90% of any invoice worth £5,000 or over and use the funds however you see fit. So what are you waiting for? If you need access to quick cash, then let’s take a look at some of the reasons why you should consider growing your business with Invoice Discounting, including:
- Larger lump sums
- Fast access to cash
- Little focus on your credit profile
- Relieves stress on your finances
- Can be used for a variety of purposes
How much can I borrow?
This depends on 3 factors: the value of the invoice, the size of your business and your chosen lender. Business lenders typically accept invoices of £5,000 or more from businesses that possess an annual minimum turnover of £250,000.
Because any potential advance is based upon a percentage of the overall worth of the invoice, there isn’t a fixed upper limit to what you could receive. By choosing to fund your business using Invoice Discounting you could acquire up to 80% of the cash contained in the submitted invoice.
So, for example, if you’re offering a lender an invoice worth £7,500 for a 90% advance, you could acquire £6,000. Plus, if you’re offering up an invoice that has a particularly high overall value you need to find a lender who can afford to grant your business the required advance.
How fast can I receive funding?
For many applicants, it’s possible to receive funding in as little as 48 hours after applying. If you can prove that your business is reasonably profitable, with an annual turnover in the region of £250,000 and that you’re able to run reliable ledger management and credit control activities, the application process can be very simple. This means that you’re not having to wait around for your customer or client to make payment. You can unlock the cash early, to the overall benefit of your business.
Will my credit profile affect decisions?
No. If your business, or any associated directors, possess a poor credit profile, it won’t affect a lender’s final decision. Subsequently, Invoice Discounting is great for a wide variety of businesses operating in a number of UK sectors, including developing SMEs. A contributing factor in this is that, like any Invoice Finance product, Discounting is a secured product that uses your receivables, or customer repayments, as security.
Will it affect my finances and business management?
It shouldn’t affect your business’ finances or how you operate in regards to credit collection and ledger management. Plus, unless you choose to inform the customer or client in question, the fact that you may have applied for Invoice Discounting will be kept confidential. The only effect that you should experience is a relief upon your cash flow as a consequence of the advance.
How can I use the funds?
Upon receiving the funds directly to your business’ account, you can use the cash to support any part of your business. This can include new or existing business projects, asset purchases and capital injections, to paying down utility and tax demands. As such, how you use the advance is entirely up to you.
Thinking about applying for Invoice Finance for your business?
If you’ve got unpaid invoices worth over £5,000, you could be sitting on essential funding opportunities without even realising it. Whether it’s to help your cash flow, clear debts or fund business projects, Invoice Finance could be the answer to your current predicament. However, when searching for any sort of finance for your business it can tricky and consume valuable time. But you don’t need to go it alone, help is at hand. If you’re concerned about mounting unpaid invoices and need cash right away, take a look how Invoice Finance can help your business.
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