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Invoice Financing

As a business owner, you may find yourself in times of difficulty when you are unable to meet deadlines for payments due to unpaid invoices. The good news is there are many ways to overcome this issue, such as invoice financing. This funding option is used by business owners around the world and gives you the chance to access money that might otherwise be inaccessible due to an outstanding invoice. Let’s take a look at what invoice financing is and whether this is a good solution for your current concerns.

What is Invoice Financing?

Invoice financing for business owners can also be called invoice factoring or accounts receivable financing. These terms all refer to the same thing, which is receiving financing from outstanding invoices. This process allows your team to increase your cash flow by getting advances with invoice finance processes via a third-party provider. The company will pay you an amount based on the invoice and then try to chase up the buyer for payment after the due date. They will naturally take a small fee for this assistance, but in many cases, it’s one of the most effective ways to quickly increase your cash flow when you find yourself in a difficult situation. It can also be done in reverse by buyers, which is called reverse factoring, but this is a more unusual service to request.

How Does Invoice Financing Work?

The invoice financing process begins when you originally bill your buyer for your products or services. In this invoice you should clearly state the payment terms and the date the payment is due on. When you find you need cash or you are dealing with many outstanding invoices, then you can work with a factoring company who will help you to raise the funds you need in a quicker manner. You’ll put in an application with the invoice unpaid and then agree to their terms and conditions. Expect the company to take at least a 10% cut on the overdue invoice, but this may increase when invoice unpaid issues are more difficult to resolve.

The company will pay you based on the terms you agree to. They may offer you a partial payment upfront and then send you the rest of the money later on when the invoice is paid. They will keep the service fee and agreed cut while given you the rest of the money to help support your business operations. It’s a great service for anyone who is looking to quickly get money for any reason. When you are learning more about what is invoice finance, we encourage you to always ask as many questions as possible up front. This will ensure you and the financing company are on the same page so that you can keep your business in a good situation financially when using this option.

Who Should Use Invoice Financing?

Literally any business owner could consider invoice financing. It doesn’t matter how big your business is, as small and large businesses will still see the same benefits from using this service. One thing to keep in mind is that this is generally considered a short-term solution to financial problems. If you are having endless issues with unpaid invoices, you’ll want to start by reviewing your terms and conditions of your invoices to ensure they are clear. From there, you may want to work with our team to resolve your invoice concerns and hopefully have to rely on financing less frequently.

The Benefits of Invoice Financing

The benefits of invoice financing are plentiful for anyone looking to quickly increase their cash flow. Some companies will send you the initial payment within 48 hours, which can get you out of a lot of tricky situations. The invoice will be the only piece of collateral you typically need to apply for invoice financing, so you won’t risk the rest of your business assets. The approval chances are pretty high for most business owners, which is why this option is often better than applying for a bank loan. Of course, it’s all about your individual circumstances and we can work with you to check if this is a good option for your business currently. You’ll no longer have to worry about chasing up unpaid invoices and you’ll leave this problem to the financing company you work with.

Are you struggling with unpaid invoices or late payments? If so, our team will be here to support you and discuss the best options for your current business concerns. Invoice financing offers many benefits to business owners, but we can also help you to resolve your invoice problems with a long-term solution. Contact us today to learn more about the services we offer or to discuss any questions you have about unpaid invoices and the best options for you based on your unique circumstances.