The Xtra Factor: How invoice finance is a key element of the accounting equation
Whitehall is keen for companies to trade their way out of trouble but traditional financial routes may be hampering progress. As a result, a fast, cost-effective solution can be found with invoice finance.
All businesses need cash to survive and in difficult economic times this can be why firms fail.
The banks have become cautious with lending and their activities are under continual scrutiny by the Government.
Even if they agree to forward cash to businesses, the time it takes can mean the difference between success and falling victim to the credit crunch.
Whitehall is keen for companies to trade their way out of trouble but traditional financial routes may be hampering progress.
As a result, a fast, cost-effective solution can be found with invoice finance.
The figures speak for themselves. According to the Asset Based Finance Association, the amount of funding advanced to UK businesses in the last quarter of 2009 was £42,910m, compared to £41,740m in the previous three months, a rise of 2.8 per cent.
Andrew Bullard, Head of Business at Cashflow UK, said: “Clearly companies are choosing this method of finance to help them escape the clutches of the recession and invest in a financially sound future.”
Invoice finance involves a funder advancing funds to a business of up to 90% of the value of their outstanding invoices.
Usually the money is advanced by the next day, allowing the client to get on with their business without worrying about when they are going to be paid by their customer.
As a result, firms can take a firm control of their finances and free up more time for the important business of winning orders.
Relationships with suppliers can also be improved because the client business can pay up more quickly helping create a more positive trading environment.
As orders accelerate invoice finance goes hand in hand with the growth of the business as the funding line increases with the orders.
Invoice finance also provides more flexibility than traditional banking streams and can even be used to repay bank facilities which, in the current economic climate, may be a positive advantage.
Little wonder then that invoice finance is providing a brighter future for so many businesses.
With so many invoice finance providers in the market, helping your clients choose the right provider can prove complex. This is where Cashflow UK can help.
Cashflow UK are the country’s leading finance brokerage specialising in factoring and invoice discounting and their specialist team of financial experts are able to offer impartial advice and find your client the best provider.
What’s more, you will also benefit from Cashflow UK’s reward commission for successful introductions, which is on-going for the life of the client.
Contact Cashflow UK today on 0800 132 156.
