When it comes to SMEs, big ideas and modest budgets go hand in hand. Unfortunately, this means lack of capital is often a factor that prevents many small businesses from expanding, despite the fact that technically they have the means to do so.
One of the biggest setbacks at play is unpaid invoices. With long payment terms becoming increasingly common, SMEs are finding it harder and harder to roll out effective growth strategies. This is where invoice financing can transform both the short, and long-term outlook of any business.
So what’s all the fuss about?
In simple terms, invoice financing steps up as an easy and flexible funding solution that enables a business to raise funds by releasing capital that’s locked up in outstanding invoices.
As the name suggests, the emphasis means that the alternative business finance process can be carried out on an invoice-by-invoice basis. For SMEs in need of fast cash that they’re actually owed, selective invoice finance is a fiscal dream come true.
Here’s why small to medium sized business across the UK and Europe are jumping on the select invoice financing bandwagon.
- Flexible Finance – As mentioned earlier, invoice financing empowers SMEs with the scope to decide which invoices they want funded, and when. If invoices are being processed on time and cash flow isn’t an issue, businesses can continue to trade as usual. If clients are slow to cough up and cash flow is slipping into negative territory, invoice financing can unlock owed capital, instantaneously
- Fast – An indicative decision can invariably be given within 48hrs, which means businesses can cash in on owed money in a matter of days.
- Transparent Finance – With no additional fees, disbursement costs or termination levies, invoice financing allows SMEs to unlock cash, without cancelling out the benefits with small print charges.
- No Ongoing Contractual Commitment – With no lock-in contracts, the service can be used as and when it’s required by the client. For SMEs still in the growth phase, the flexibility to pick and choose when to action invoice financing is a huge draw card.
Keeping cash flow healthy
When it comes to running a successful SME, nothing’s more important than cash flow. Here’s how select invoice financing can help.
- Release cash – With the option of select invoice financing on the cards, SMEs can release positive cash flow that’s tied up in invoices. From paying salaries and processing bills to covering overheads and investing in new equipment, it’s a way to beef up bank accounts before invoices are processed.
- Sell with Confidence – Thanks to select invoice financing, SMEs can win big contracts knowing that cash flow strains and lengthy payment terms won’t be an issue. Say farewell waiting three months for revenue to be recognised!
- Strengthen Supplier Payments – When chasing up payments is no longer a drama, SMEs can renegotiate payment terms with suppliers, and often score prompt payment discounts. Ultimately, this streamlines business operations, and boosts profit margins.
If you own an SME and have growth on your radar, invoice finance is a fast, flexible and surprisingly easy service that unlocks capital, manifests opportunities and strengthens cash flow from the inside, out.