From tiny, local businesses all the way up to global institutions, cash flow can be a constant cause of anxiety. A handful of late payments or unforeseen expenses can create chaos, and bring thriving firms to the point of collapse.
The good news is that there is a solution. Using trade finance, you can get instant access to all of your payments, ensuring working capital is always kept safe and secure. As well as the stability and peace of mind this can provide, there are many other ways that invoice finance can strengthen your firm and eliminate those cash flow concerns.
An end to credit checks
Unlike other types of borrowing, trade finance is not reliant on time-consuming credit checks. Not only can these be infuriating for companies in need of fast cash, they often prove unsuccessful for new businesses without a long credit history to call on. By contrast, an invoice finance agreement can be made regardless of a company’s past and only relies on information concerning the customer and size of the invoice to be paid. This makes for a speedy decision from the provider and instant support for your cash flow.
Quick cash support
The speed and reliability of invoice financing means you won’t be caught out by unforeseen expenses or inflated repayments. Instead, with invoices being turned into capital in just a few hours, you can put your hard earned cash into further expenses that will, in time, reap greater rewards.
A long-term solution
While loans and cash advances provide vast lump sums that leave you with huge excess, invoice finance agreements are uniquely designed to suit the size and ambition of your business. Not only will this generate a stable level of working capital, it also encourages sensible and sustainable business habits that will be beneficial going forward.
Securing personal or company assets such as your home or a vehicle to a loan can be an intense source of anxiety with potentially devastating consequences if cash flow falls and you find yourself unable to make repayments. It might be a relief then, to learn that invoice finance agreements are not built on securities. This makes for risk-free borrowing with every penny you receive covered by client payments.
Wave away low season blues
Whatever your line of work, chances are there are times throughout the year where when business drops; lowering profits and leaving cash thin on the ground. Invoice financing can alleviate these seasonal pressures, maintaining a constant stream of income through even the quietest parts of the year. Having a level of capital secured by invoice financing will also pave the way towards increased expenditure and expansion, as busier times approach.
No more monthly repayments
A thorn in the side of so many borrowing businesses, the repayments that accompany all loans and overdrafts regularly fluctuate, making accurate cash flow projections almost impossible to achieve. Invoice finance on the other hand, comes with a small, fixed fee, which is deducted from the payments before they reach you. This helps to ensure that you are never left out of pocket, and can easily measure both your income and expenses.
Your money guaranteed
As your businesses grows and your client base grows with it, so does the risk that someone will fail to pay you on time. Having bills to pay and loan repayments to make, just one late or missed payment could leave you in a precarious position, struggling to clear your expenses. Fortunately, an increasing number of trade finance facilities are now providing non-recourse arrangements, meaning that if your customer misses a payment, you will still be paid.
Not only a generator of growth, arguably the greatest strength of trade finance lies in its ability to offer stability and reassurance to businesses of all kinds. If you think your company could benefit from invoice financing, or you would like to find out more about how it works, please do get in touch today.