There are times in business when our cash flow can’t keep up with our growth. As we get ready to expand, we need regular, measurable income that we can use to fund our investment in the company. Without this, we can’t hire staff, invest in assets, or pay our bills.
If you are looking to expand your business but are worried about having the cash flow needed to do so, then we have a solution for you, invoice finance. Here is exactly what invoice finance is, and the three ways that it can be used to scale your business.
Invoice Finance for Merger’s
When two companies merge, it’s both an exciting and frightening time for the businesses involved. While systems are set and new cultures are created, cash flow slows down. New orders are put on hold and customers are warned of delays, but the one thing that doesn’t stop is the demand for us to pay our overheads.
By utilising invoice finance, businesses can take unpaid invoices and have a finance company pay a percentage of it in advance. For example, let’s say one of the companies merging has outstanding invoices valued at £350,000. They could take these invoices to an invoice financing company which would pay them a percentage of their value (typically up to 90%).
The invoice financing company offers 75% of the value of the invoice. This puts £262,500 into the bank account of the merging company and leaves them with a healthy pot of cash to pay off any overheads while the merger takes place.
Invoice Finance for Cash Flow
Some businesses rely on one-off orders and payments, especially in the transport and manufacturing industries. This is a sustainable business model, but it can make growth challenging. For example, if these businesses want to hire more staff or invest in assets, then they don’t always have the confidence that their cash flow will cover the large upfront expenditure.
Invoice finance means these companies can create a measurable source of cash flow which they can use to fund their growth. Their existing invoices can be paid in advance, and they can use the capital given to them by the lender to support their expansion without worrying about any “quiet months”.
Creating a Buffer with Invoice Finance
Every business needs a buffer. We never know when a piece of machinery might break, or our energy bills will rise. Having a buffer in the bank means that our business can face the unexpected without becoming crippled by the financial blow that it brings. It gives us confidence that both our business and our staff’s wages are safe.
Invoice finance means you can feel the benefit of your invoices being paid in a couple of days, not a couple of months. You can take a few of them, have them paid by an invoice financing company, and use this to create a financial buffer.
Invoice Finance UK
As an invoice finance broker, we have access to the best deals and most exclusive rates. When you work with us, you’re not limited to one offer from one lender. We go to multiple lenders on your behalf and collect a number of different offers before presenting the best ones to you.
We are offering businesses free consultations regarding invoice finance. Book yours by clicking here. Work with us to expand your business safely and sustainably. Say no to cash flow issues and book your free consultation today.