Invoice Finance is growing in popularity and an increasing number of SMEs are using it.
According to the Asset Based Finance Association (ABFA), the total amount advanced to UK and Republic of Ireland businesses through invoice finance and asset-based lending at the close of 2017 was around £23bn, up 5pc on the previous year. The vast majority (81%) of this funding was advanced using invoice finance.
Invoice finance describes a range of financial products designed to bridge the gap between the delivery of goods or services by a business to its customers and the receipt of payments from those customers. Populous World offers invoice finance through an easy-to-use digital interface, with payout immediately triggered on invoice submission and often clearing the same day.
Populous World offers invoice finance through an easy-to-use digital platform that releases instant working capital based on invoice verification and often clearing the same day.
Invoice finance is most widely used by SMEs across a variety of industries – in particular those businesses that might need to keep appropriate stock levels to be able to respond efficiently and effectively to their customers’ demands.
If your business is looking to adopt invoice finance, here are 5 useful facts about the industry:
1. Innovative cash-flow products such as invoice finance will enable sufficient funds to achieve growth. Managing cash flow in the form of invoice finance will help businesses support their customers more effectively and, by extension, improve customer relations.
2. The flexibility that invoice finance offers means that companies can have sufficient supplies of key products ready to respond to demanding customer requests. Businesses that can assist their customers at short notice will clearly have an advantage over competitors that need to wait for a confirmed customer request before ordering a particular product.
3. The combined amount of potential capital tied up in unpaid invoices and the associated costs of chasing them is astounding. According to the Department for Business, Innovation and Skills, unpaid invoices amount to 14% of SMEs’ annual turnover, or £252bn and the costs associated with pursuing payment are around £10.8bn a year.
4. Immediate access to working capital through invoice finance allows businesses to invest in other important areas that could otherwise remain stagnant when cash flow is limited, for example; new equipment, increase production/manufacturing, essential marketing.
5. A healthy cash flow position also frees up time and opportunities for businesses to explore new markets and territories – providing greater flexibility.
>> 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.