International Invoice Finance
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The effect of electronic communications has had many benefits for UK businesses - not least that almost any company can now trade on the international stage simply by setting up a website. The UK has always been a major international trader and, today, it is as easy to work with a client on the other side of the world as one on the other side of town.
But the financial solutions to support this kind of enterprise can often seem to be lagging far behind. For many businesses, the complications of international trade present a barrier. The complications of a pro forma invoice, the quote on the merchandise, negotiating shipping costs, opening a letter of credit at your bank, customs and documentation may all seem to be a maze of bureaucracy and expense, harking back to an age of steamboats and telegraphs.
In fact, it may be possible to handle many kinds of export business as simply as working with a domestic client. The secret is to enlist the help of an experienced expert Invoice Finance provider - and it could help you smooth your company’s cash flow at the same time.
Managing cash flow uncertainty
At Rangewell we recently set up an international Invoice Finance arrangement for a company working in the display and exhibition sector. They provide sophisticated audio-visual multimedia integrated installations for museums, theme parks and exhibitions. Already a leader in the UK market, their services are in increasing demand from clients around the world, and recent installations have been developed for clients in the US, the Middle East and India, among many others.
Each installation is custom designed and built, and can cost as much as £3 million. The company is looking to sell an increasing number each year and to sell them into an ever-growing list of countries. The use of International Invoice finance has become central to their plans, for two very important reasons.
The first is that it allows the company to call on the international expertise of the provider. They have international teams, with expertise and local contacts in most international markets. With a local presence and a full understanding of commercial practices, they can remove the uncertainties from doing business internationally.
The second is that it can provide a solution to the demands on cash flow that can be a problem associated with international business.
Issues such as shipping times and different approaches to credit in different markets can create long delays between despatch of an order and you receiving payment. When an order is worth in the region of £3 million, this can create a major financial hole that an exporting company needs to find a way to fill.
Invoice Finance can provide the answer. Many exporter SMEs find that they face real cash flow problems caused by late payments. With an Invoice Finance arrangement, a lender will provide a cash advance as soon as an invoice is issued by you.
This can mean that, as a manufacturer, Invoice Finance can provide a steady flow of cash, even when your customers are slow to pay. You receive 90% of the value of each invoice you issue as soon as you issue it. You then receive the remainder once the client settles, less the lender’s fees for the service.
“Export or home market, you get paid faster.”
Take your business further
Whether or not your business is ready to trade internationally, an Invoice Finance facility could be the answer you need to take your entire business further, accelerate your cash flow, and support your growth. As experts in business finance and with contacts across the entire UK lending market, we can help you find the supplier you need. So if your business has a question that Invoice Finance could answer, apply today or find out more with Rangewell.