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What is Invoice Factoring and how is it used?

Published on 16th August 2018 - Last update on 12th September 2018

Acquiring the funds you need to support your business in its pursuit of a strong and sustainable future has never been an easy feat to achieve. Although passion, determination and a detailed, up-to-date business plan are all crucial for effective leadership, without the necessary capital at your disposal you’ll find maintaining your business to be an uphill struggle. However, if you need access funds and fast, the solution could be closer than you think. If your business regularly trades using business-to-business (B2B) invoices, you could reinvigorate your business’ momentum through applying for Invoice Factoring.

What is Invoice Factoring?

If you possess an annual turnover of no less than £100,000 and are currently waiting on unpaid B2B invoices, you could be eligible for Invoice Factoring. Invoice Factoring is a ‘Secured’ finance solution which enables you to receive up to 90% of the capital tied up in any outstanding invoice worth in excess of £5,000, and for any number of purposes. To qualify, you must give lenders access to your credit profile and be able to maintain up-to-date ledgers. Although you can choose to pursue the debtor yourself, Invoice Factoring does give you the option of allowing the lender to run credit control procedures on your behalf, and with discretion. Plus, it’s also worth noting that some lenders offer Bad Debt Protection, reducing the risk to your business in the event that the debtor fails to resolve what they owe within 120 days. However, what can Invoice Factoring be used for?

Does your need access to quick cash? Got money tied up in unpaid business-business (B2B) invoices? Apply for Invoice Finance and learn more about how your business could benefit.

What can Invoice Factoring be used for?

For many business owners, Invoice Factoring offers a variety of useful benefits. As well as being quick to arrange, sometimes in as little as 48 hours depending on the complexity of the request, Invoice Finance also carries no usage restrictions. This means that the funds you could receive on the back of each invoice can be used for any number of purposes in and around your business. That said, if you are considering Invoice Factoring for your business, some of the most common reasons for using this product include:

Supporting uneven cash flow

As your business continues to trade you may encounter any number of issues which could adversely affect your ability to perform vital day-to-day operations. This could be as a result of missed payments, unexpected expenses, changing trends or seasonal trade fluctuations. However, whether you’re anticipating problems in the near future or require urgent assistance to smooth out your cash flow now, Invoice Factoring could present you with the funds you need to move forward.

Preparing for a vital contract

In many sectors, being able to successfully compete for vital project contracts is crucial. But whether from Government bodies or large corporations, you need to get everything ready beforehand in order to demonstrate your business’ capabilities and integrity. However, if you’re currently working on an existing project or have just completed one, you may lack the necessary capital to gather everything you need. Yet, regardless of whether you’re looking to purchase raw materials, gain fresh supplies, repair damaged equipment or pay staff wages, you could raise the funds you require on the back of your unpaid B2B invoices with Invoice Factoring.

Training opportunities

To produce quality goods and services to keep your customers returning time and again, offering training opportunities to your staff is crucial. However, if you lack the necessary skills and knowledge to expand their expertise, you’ll need to source opportunities from outside your business, for example with university courses or evening classes. Although this will be an invaluable investment in the competency of your team, finding the necessary capital to enable you to do so can be a challenge. By using the capital tied up in your outstanding B2B invoices with the aid of Invoice Factoring, you’ll be able to support and encourage staff members to pursue further training opportunities, allowing you to constantly raise the standard of your business operations.

Could your business benefit form Invoice Factoring?

No matter where your business stands in its development, supporting your day-to-day operations and seeking more ways to expand is a responsibility you can’t overlook. But as an SME business, acquiring the capital you need to do so isn’t easy. You may already be pouring funds into other area or have capital tied up in unpaid business-to-business (B2B) invoices, limiting your ability to invest further. However, thanks to the Alternative Finance Industry, you now have access to more funding opportunities than ever before, including Invoice Factoring. All you need to do is source an agreement appropriate for your business’ needs.

At Rangewell, we’re an Access to Finance specialist who’s mapped over 400 lenders to offer you an overview of more than 23,000 business finance products. Our services are free to use and we’ll also guide you through the application process. So if you’re looking to gain access to quick cash for whatever your business requires, apply for Invoice Finance today or find out more with Rangewell.


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David Harrison

David Harrison

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