An insight to business types that use invoice financing

Business types that would require invoice finance

It can be perceived that enlisting the service of invoice financing means that a business is entering an admission of failure or isn’t doing well. However, this is not the case. In certain circumstances, there are businesses that are being mismanaged in terms of cash flow operations. Every business is distinctive and operates in a different way that leads to a requirement of funding for various reasons.

A type where a business is simply growing too fast, (this is probably the best type of business) and cannot afford to wait for a customer to pay before they can buy stock. The business needs to collect cash quicker than customers will pay them.

You could also see a scenario where a business is generating steady cash flow but may experience a case whereby what they are selling suddenly becomes vogue and receives one large order. An advance of cash flow is then needed to buy stock or raw materials for production, ahead of waiting for their invoices to be paid by their customers.

In an unfortunate case, a business may suffer an event where one of their customers falls into bankruptcy, which then leaves the business in a cash flow shortfall for an unknown period of time.

Another occurrence could be when a customer buys a business’s entire stock, the business cannot then wait for the invoice to be paid as they will have no stock for a long period of time.

Such is the same outcome for a business that depends on adding value to the raw materials that they buy. Adding value is the name of the game in the raw materials business. If the process of adding value isn’t consistently efficient, a company risks reduced profitability or losing money.
By way of an example, a beer brewing company adds value to their raw materials; hops, to create their product, beer, that is the value creation. When they receive this stock, it then takes 1-2 months to produce the beer, during this time they are dependent upon cash flow to run their day to day operations, and they are reliant on their invoices to be paid before they can proceed with operations. It is a permanent chasing trail.

An innovative approach to finance

In today’s world of finance and technology, alternative and non-traditional financial solutions appeal to businesses, of all sizes. It may be that a short-term cash flow solution is more appropriate to a business rather than committing to a long-term bank loan. In terms of available funding resources, a business could merely be seeking short-term cash flow relief as they have run out of banking facilities and don’t want to take out an overdraft, they may well have even reached the extent of their existing overdraft and has no more capacity at the bank. It could also be the case of a start-up business that is not eligible to apply for an overdraft and does not want to resort to relying on a credit card.

It goes without saying, that all businesses, despite their situation, should adopt effective cash flow management and a steady influx of cash in order to grow, sustain and run their day to day operations. With this in mind, a business that is financially in a healthy position can then focus on important tasks, such as exploring new business opportunities or plan for expansion.

Selling invoices at Populous World

You may be wondering why invoice financing with Populous World is different to other invoice finance providers.

To start with, our facility is truly bespoke. This is our way of making it easier and less restrictive for SMEs to participate. Our bespoke service means that invoice sellers can pick and choose which invoices they want to finance, this is also combined with no lengthy fixed contracts, no annual fee, no on boarding fee and no minimum of invoices (quantity and value) is required.

Selling invoices  or using the invoice discounting service on our platform also means that businesses are able to unlock up to 95% of the value of an invoice to release the cash flow required in as little as 24 hours, (providing all verification checks have been approved).

As previously stated by our non-executive chairman, Kevin Ashby, Populous World is a swift and nimble organisation, and has the attentive ability to cater to SMEs who require even a small amount of funding or a single invoice, compared to providers that have infrastructures in place that require a large volume of invoices and lengthy fixed contracts.

We at Populous World recognise that there is a gap in the marketplace for single invoices and have built our systems to fund SMEs invoices as and when they need to.
Alex Oritogun, head of business development, said, “With Populous World, you can credit insure a single invoice without having to get a full turnover cover. Moreover, you get the quality of care; we truly value our clients and want to see them succeed. Also, speed; once we verify all checks, funds can reach businesses within 24 hours”.

Populous World specialise in helping businesses to bridge cash flow shortfalls and offer invoice finance expertise.
To speak to a member of our team and discuss your bespoke funding requirements, contact: [email protected]

Lou Chan
Populous World