Green light for innovative finance
Leading invoice finance broker welcomes Government backing for asset-based finance.
The recent Green Paper described the “crucial role” that forms of asset-based finance such as invoice finance could play in the economic recovery – a sentiment echoed by Andrew Bullard, head of business at leading invoice finance broker Cashflow UK.
The paper outlined a range of options to help companies tackle the “very serious” problem of funding and recommended that firms examine a range of “innovative” methods of finance.
Mr Bullard said: “Finally there seems to have been some official recognition of the continuing problems businesses have been facing in accessing finance, and these have been growing steadily worse in recent months.
“The Government is right to highlight how invoice finance can overcome problems of cash liquidity which hamper the growth of firms.
“Cash is vital for small businesses because they are key to the future growth of the economy, creating jobs and boosting trade, both nationally and internationally through exports.”
The Green Paper highlights how debtor balances are often the largest asset on the balance sheet, often representing two or three months of sales.
It points out how invoice finance can offer major savings in administration and reduce the need to borrow at high rates of interest.
The Green Paper goes on to say: “This type of finance could play a crucial role in securing access to working capital finance during the recovery for many businesses.”
Mr Bullard points out that using factoring and invoice discounting as funding solutions gives firms an instant cash injection by releasing funds from invoices as soon as they are issued, which gives an immediate and ongoing source of working capital.
This helps firms avoid the problems associated with the credit squeeze and allows them to concentrate on the vital work of developing their businesses.
Mr Bullard added: “Factoring and invoice discounting are proven to be viable forms of finance whatever the economic climate, and finance brokers, such as Cashflow UK, can support businesses in finding the right provider to match their business needs.
“There are many ways of raising finance and it is right that invoice finance is being promoted by the Government now to ensure small firms are given every chance of survival.”
Leading broker Cashflow UK gives free, impartial business finance advice and has strong relationships with more than 50 finance providers. For further details about invoice finance, look at www.cashflowuk.com or call 0800 132 156.
