So, what if we told you there’s an easy way to turn your unpaid invoices into real cash you can use right now? That’s what invoice finance is. It’s a savvy move to keep your business flowing flawlessly without the usual wait for payments.
Read on to learn how invoice finance in the UK works and how it can help your business burgeon by improving your cash flow fast.
What is Invoice Finance?
What if you could unlock the cash that’s just sitting in your unpaid invoices? The good news is, you can. Invoice finance is your answer. It’s an ingenious way to access the money you’re owed, turning what’s owed into cash in hand, rapidly.
How Does Invoice Finance Work?
Here’s a simple breakdown:
- Invoice your clients as usual once you’ve delivered your goods or services.
- Send those invoices to a finance provider who gives you most of their value upfront – no more waiting around for payment!
- Receive up to 90% of the invoice value within a day or two.
- Get the rest, minus a small fee, once your customer pays up.
This process means you can keep your business ticking along without cash flow glitches.
Types of Invoice Finance
Next up, here’s a bit about the different types of invoice finance you can get your hands on.
Invoice Factoring in the UK
But what is invoice factoring in the UK, exactly?This one’s straightforward. You sell your unpaid invoices to a factoring company. They give you a large chunk of the cash immediately, usually about 70% to 90%, and then they get busy collecting directly from your customers.
Once these invoice factoring companies have collected, they send you the rest, minus their fees. It’s pretty hands-off for you, which can be a relief if chasing payments isn’t your thing.
This process helps businesses get quick cash without waiting for customer payments.
Invoice Discounting
Have a decent grip on your credit management? Then invoice discounting might be just what you need. You’ll get a cash advance against your invoices, say around 70% to 90%, but this time you keep control of collecting the payments.
Your customers won’t even know you’re using the service. It’s discreet and keeps you in the driver’s seat with customer relationships.
Selective Invoice Finance
Sometimes, you don’t need to finance every single invoice. Enter, selective invoice finance. Just pick the invoices you want to fund, send them over to a finance provider like us, and get a big chunk of their value right away.
This lets you deal with your cash flow on your terms, without messing up your customer relationships. Want more control over which invoices to fund? Check out our invoice finance options.
Benefits of Invoice Finance
Choosing to finance your invoices can iron out your cash flow creases. Here’s why it might just be a brilliant move:
- Asset-Free Security: The invoices themselves secure the finance, so you won’t need to tie up other assets.
- Fast funds: Need cash fast? Invoice finance can be sorted in as little as 24 hours – way quicker than waiting on traditional bank loans.
- Grows with you: The more business you do, the more finance you can access. It’s that simple.
- Save you time: Invoice finance speeds up the business invoicing process, so you have more time to focus on your business.
The Takeaway
Are cash flow qualms keeping you up at night? Invoice finance might just be the pillow you need. You unlock the cash tied up in your invoices to keep your business running like a dream.
Essentially, you use what you already have – just better. Maybe it’s alleviating cash flow solutions or perhaps keeping a handle on growth. Alternatively, you might just need to keep tabs on finances without taking on new debt.
Want to learn more about how this could work for your business? Check us out here at Sorbus Finance – we can’t wait to chat about your options. Our aim? To make your financial management as easy as 1-2-3. Talk to us now.
Why not check out our Free Invoice Finance Guide?