Top reasons you should be using invoice finance for your business
Top reasons you should be using invoice finance for your business
Times are changing, and so are the business financing options. Businesses often experience cash flow. They are always in need of having liquid cash to manage multiple aspects of the business. Including salaries, suppliers and investments fees. Cash flow can sometimes be scarce and can force business owners to borrow money. Instead of opting to borrow from banks, get loans or max credit cards, businesses can use invoice financing. Invoice financing is a way for businesses to borrow money against the amounts due from customers with a percentage of the invoice amount payable to the lender. Invoice financing is a way for businesses to improve cash flow earlier than they could if they were to wait until their customers paid their balances in full. Invoice financing is also known as “accounts receivable financing” or simply “receivables financing.”
There are so many benefits of using invoice financing as a funding solution than the traditional funding ways. But, before knowing all the lucrative benefits of invoice financing and compelling reasons to use invoice financing, let us understand what is invoice financing.
Invoice financing is a simple way of improving cash flow. It involves selling the invoice to a third party that is to the financial companies. It permits business to get liquid cash against unpaid invoices.
So, here the few reasons to use invoice financing for your business. These are the top reasons you should be using invoice finance for your business.
1. Get quick access to funds
Invoice financing can be quickly accessed and is often approved within weeks, so you don’t have to wait for months to get the approval. Once the request is approved, you can quickly access the cash within 24 hours at call.
2. It does not incur a debt
Invoice financing is not a loan. You are borrowing money, which you have earned from your selling. It is neither a loan or a debt. You don’t have to stress about increasing your liabilities of the business.
3. The fees are lower
This certainly depends on the invoice financing companies. But, the fees are less compared to the other finding solutions. Only 1.5%-2.5% of the fee is typically charged per invoice. There are no hidden fees or set-up fees involved in the process. Invoice financing is the perfect solution when cash flow is hard and business needs urgent liquidity.
4. No long-term commitments
Invoice financing is a short-term financing solution. You can use invoice financing only when you need liquid cash or when the cash flow is hard or when the unpaid invoice is large. There is no long-term commitment, and so you only pay for the invoices that we finance.
5. Buy more inventory
Despite the fact of what business you are into. Extra cash on hand is always excellent. You can pay suppliers/employees, increase production, buy raw materials needed to complete the order, complete all your financial settlements on time, use cash on other business operations. This way, you can boost growth and increase turnover.
6. It is based on our current project
Invoice financing is a finance solution, which is based on the value of the outstanding invoice that is your receivables. This is suitable for the small business or newbie businesses who are growing and have quick increasing sales and good prospects but have short term trading history. Having a short-term trading history means they do not qualify for quick bank funding.
Ready to fuel your business growth with better cash flow and quick cash access? Don’t wait for 30-90 for the payment, make your next invoice smart with Smart invoice finance company based in Sydney. Business finance in Australia has drastically changed, it’s time for you to adopt the new changes and start growing faster.
If you are looking invoice financing for small business, Smart invoice is the right place for you. Don’t wait any longer, get your due payments clear and smoothly manage cash flow.
Photo by William Iven on Unsplash
