5 Industries That Use Invoice Finance

When it comes to business funding, Invoice Finance is used by a wide range of industries. It offers the speed and flexibility you need to react quickly when the market changes, and can form the foundation of a plan for growth.

Here we look at various industries to which invoice factoring and invoice discounting are typically used, and identify the reasons why business may have chosen this type of financing.

1. Construction

The hierarchy of contractors and sub-contractors in the construction industry often means long delays in payment for those at the bottom. Construction factoring addresses this issue, and helps whether you’re a single, independent contractor near the bottom of the payment chain, or a small company in the middle.

2. Recruitment

Recruitment companies help people find work and bring in money when the job market is otherwise slow. Having said this, even the recruitment agency themselves can experience cash flow troubles for several reasons.
The discrepancy in the time between paying staff and getting paid for the services provided has always been an age old dilemma for recruitment companies to overcome. With such long waiting period for payments, recruitment companies stumble to manage any sort of control over cash flow, making planning for future all the more impaired.

3. Manufacturers

Having a positive cash flow is crucial for manufacturing companies. When the cash flow becomes stagnant or even decimates, a company in this industry could go out of business or suffer a severe setback because it cannot fulfil its orders. There are several functions that operate within a manufacturing firm that depend on cash flow and its future, such as high production costs, tariffs, rising transportation, fuel costs and fluctuating currency values.

4. Logistics

Companies within the logistics industry tend to have a weightier demand for cash than many other industries, due to seasonality reasons such as fluctuating costs of fuel. This leads to companies struggling to find the cash they need to ensure smooth operations or make reliable financial projections. A logistics company’s performance success depends on being able to deliver services within a fast response time and with an influx of cash flow, these key performances can be easily met.

5. Wholesale & distribution

Cash flow is a renowned occurring problem for wholesale and distribution companies. The payment terms between a wholesale company and larger companies such as high street retailers, e-commerce sites, supermarkets and department stores is around 120 days. Within distribution, customers expect efficient systems for timely delivery of goods, but their payments do not always follow those same expectations.

The disparity between delivering goods and receiving payment for those goods means manufacturers have unreliable cash flow, which in turn stunts their growth potential and falters opportunities to sell to new stores or accept further incoming orders with customers.

Whether you need to improve your cash flow to keep up with bills or to expand your business, factoring firms such as Populous World can offer affordable and fast financial solutions.

>> Is your business in need of fast, short-term financing? Do you need to access cash faster than your customers pay you?

Populous World is an Invoice Finance provider that unlocks working capital for UK businesses.

Bridging your business’s cash flow gap is something that Populous World excels in delivering, providing you with the funding tools to grow and sustain your business.

For more information, visit us or contact a member of our funding team: [email protected]

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