Business Funding: Invoice Discounting
Location: London
Finance Amount: £750,000
Background
A healthcare recruitment agency based in London was struggling with cash-flow because they worked with local councils and authorities. They placed healthcare workers into hospitals and nursing homes. They had large amounts of outstanding invoices which took on average 45 – 60 days to be paid. On top of this they were paying their agency workers on a weekly basis. This meant there was a cash-flow gap between invoicing and getting paid. They had previously used invoice factoring, although it became expensive for them. They approached us, Pinnacle Business Finance, to find a solution to support the cash-flow within their business whilst maintaining control within their business.
Solution
After we spoke to the healthcare agency business owner, we quickly identified they were under time constraints to find a solution quickly and required a cash flow boost. We spoke through different funding options. They advised they had previously used factoring when they were a new start business. This helped them to grow, although it became expensive as turnover increased.
When we costed out the difference between a business loan and invoice discounting this allowed us to identify invoice discounting was the lowest cost and the most financially viable option. We collated the information from the client and compared the invoice discounting finance options to ensure they were getting the best invoice discounting facility possible.
The invoice discounting facility was set up for them and released over £500,000 on day 1 which they used to continue to grow the business. This took away the cash flow pressures of waiting to get paid from outstanding invoices and allowed them to concentrate on increasing turnover and profitability.
