Start-ups are the backbone of the British economy, with the latest figures from government-backed national enterprise campaign StartUp Britain revealing that already, 2016 has seen more than 335,000 new SMEs throw open their doors for business. Tech City UK CEO Gerard Grech has hailed the nation as a “breeding ground” for pioneering tech start-ups, asserting that its fertile tech eco-system is a melting pot of opportunity.
Of course, it’s not all sunshine and rainbows when kick-starting a new business. In fact, Forbes dismally reports that 90% of small businesses fail. But that’s not to say ventures aren’t worthwhile. The trick is simply knowing how to be in the top 10%, and stay there. How? Ask any established entrepreneur, and they’ll testify that establishing a healthy start-up, cash flow is an absolute must.
The importance of creating a fluid cash flow
At first glance, a full ledger facility such as factoring can appear to be a good financing solution. As a form of debtor finance, the arrangement sees businesses sell accounts receivable invoices to a third party (aka the factor) at a discounted rate https://www.globalassetfinance.com/invoice-factoring/ and https://www.globalassetfinance.com/invoice-discounting/ Yes, this can be an effective way to meet present and immediate cash needs. But ultimately, the factor-friendly agreement eats into the profits that are so desperately needed to grow and nurture new businesses.
So what are the alternatives? For small businesses wanting to retain their hard earned profits, alternative financing is a far more attractive option. Why? Here’s the lowdown on the key benefits of selective invoice financing, and why your small business should get on board.
The power to choose
Unlike other contracts that lock you into factoring off every invoice in your books, selective financing lets you decide what’s on offer for funding. This means that if you want to hang on to the invoices that you can afford to wait on, there’s no dramas. Plus, you can choose when you want to finance, whether it’s once, twice or three times a week. Plain and simple, the choice is entirely up to you.
Small businesses are intrinsically fluid, which means that committing to long-term contracts can seriously hinder progress. With selective invoice financing, you can take advantage of factoring, with the total peace of mind that if something changes, you can shake up your financing arrangement to fit the unique needs of your business.
No minimum fees
While some third parties insist on minimum fees, Global Asset Finance Limited and its partners, selective invoice finance is open to businesses of all shapes, sizes and profit margins.
Forget time lags between deciding to pursue financing, and receiving an actual advance. With select invoice financing, you’ll get your cash within 24 hours. Talk about fast money!
No hidden costs
The last thing newly established SMEs need is unexpected bills breathing down their necks. That’s why at Global Asset Finance Limited and its partners, offer predictable cash flow, at a predictable price. Say goodbye to monthly, initial, termination and management charges – it’s as simple as that.
At the end of the day, bank overdrafts and third party financing will always have a place in the start-up market. But as far as we’re concerned, there’s a time and a place.
Due to the inflexible nature of contractual factoring agreements, this type of financing can be cripplingly restrictive for start-ups.
That’s why we’re advocating for selective invoice financing:
The new age alternative to orthodox Invoice Factoring agreements.