Improving cash flow
Invoice Finance improves short term and long term cash flow requirements. Repayments are managed on a revolving basis. Invoice Finance is often seen as releasing money that you are owed in outstanding invoices.
Pinnacle Business Finance
Confidential Invoice Finance
Invoice finance will generate capital for your business by utilising the invoices owed to you, typically 80‑90% of the invoice value as a prepayment. When the Invoice is paid, the remaining percentage of 10%-20% will come back to you. Facilities are either Invoice by Invoice, or on an ongoing basis. This is a brilliant way of boosting your cash flow by using money that is owed in invoices with an easy repayment method.
If you have experienced bad debt, it's painful. All bad debts come straight off your bottom-line and can jeopardise the business, taking away your hopes for growth. Most invoice finance providers will offer some form of protection against this - worthwhile considering as it's just another way to protect you and your business.
Protecting Against Bad Debt
Having good relationships with debtors is essential, so it's worth thinking about the impact the financier making contact could have, although outsourcing can provide a useful way of accessing professional credit controllers. Understanding your business finance needs are essential – we can speak to you about this.
Some Invoice finance providers will want to take on all your invoicing, where others will work on an invoice by Invoice basis. Again we can speak to you about this. Invoice Finance is just one of the forms of commercial finance we can advise on. Making sure the cashflow keeps working is key to the growth of any small business.
Points To Consider
Invoice In Advance
Cashflow – It allows businesses to keep the cash flow moving, with typically 80-90% of the invoice value available to you. The remaining amount comes in once the Invoice has been settled. By giving a business the money and comfort of easy repayment, it can avoid the pitfalls of over trading or running out of cash.
Efficiency – Most invoice finance companies offer forms of factoring. This means that they will manage your credit control and sales ledger. It takes away the workload of chasing calls and ensures you can focus on selling your product!
Speed – Most invoice finance providers can have a facility set up for you within a couple of weeks, making it a fast and easy option.
Security – Invoice finance providers advance against the invoices, so should you fail, they still have a way to settle the amount owed. It's a secured way of raising finance and always something to consider.
Flexibility – Since money is being advanced against invoices, the more you raise, the more money it generates. It is a flexible way of raising finance that should ensure you have enough working capital.
Invoice Financing vs Factoring
The market has two distinct product areas, factoring and Invoice Discounting.
Factoring – You outsource your credit control to the invoice finance provider, they make the chase calls and send letters. It's a great way of relinquishing the burden of administration to someone else. They still advance the money and help collect it in supporting your cashflow both ways.
Invoice Discounting – This enhances your cash flow; however, you carry out all the administration of credit control. Often done confidentially, it's an excellent way for large and medium-sized businesses to raise working capital.