Invoice purchasing is a beneficial alternative to obtaining quick invoice funding to advance your cash flow and meet your evolving business needs. This method of finance uses invoices as a way for businesses to unlock cash tied up invoices and therefore speeding up cash flow. This is achieved by listing invoices to a third party (investor) for purchasing, a majority of the funds (typically up to 85%) are then advanced to the business, (the borrower) the third party then receives a percentage of the invoice.
An influx of funding improves cash flow and working capital status, which ultimately encourages a breakthrough into a positive financial stance.
Achieving positive trends on your sustainable growth curvature
Unquestionably, every business owner strives to accomplish constant business growth and aims to avoid financial barriers that can threaten growth and company expansion. The need to be smart about managing cash flow is currently more important than ever. Traditional finance providers have never been more reluctant to lend to SMEs, and at the same time, large corporates want to hold onto their cash for longer and are doing so by extending payment terms to their smaller suppliers.
This indicates that invoice purchasing can be a vital and effective tool to preserve cash flow management. Businesses should strengthen their cash reserves and set up credit facilities when times are good. By thinking ahead, they get more funding at cheaper rates than if they were to seek finance during more stringent times. Economic uncertainty and unexpected expenses are widespread and the perceptive, prudent businesses are the ones that gain advantageous opportunities when they can.
Moreover, businesses that fail to create the right strategic balance can suffer a financial downturn and get trapped in a poor credit situation.
Slow paying customers and vendors can hinder your business functions and de-stabilise your competitive position.
In order to manage everything properly and avoid a business standstill, SME’s need to acquire necessary capital for smooth and up to date business operations. Extensive research and studies have found that nearly 65% of all entrepreneurial ventures in the U.K, including both small and large scale initiatives fail to make an impact on their first year business operations due to ineffective cash flow management.
Invoice finance is a funding method for businesses to improve their cash flow. Whenever a business is experiencing a financial burden that one way to ease it is to ask help from a factoring company which will be the one that will be buying the unpaid invoices that these businesses have. It is when this is done that the businesses will have an advantage and a working capital to grow their business. It is with an invoice purchasing that you will be able to have a number of advantages.
It is a better cash flow that one can have with an invoice purchasing. Paying the bills can be done with an invoice purchasing since it will provide you with the cash that you need while waiting for the clients to you up. When you will have this one that it is the cash that you are waiting to have that can be used for a cash infusion or to improve the business that you have. Whenever you will get the cash that you can use it to purchase new equipment, restock the supplies that you have or hire more employees. It is your business that will be able to expand in a much faster rate when you’ll do this one.
Invoice finance allows you to get access to instant working capital and can be received in just a matter of one or two days.
Invoice purchasing — the definitive lending solution for the foreseeable future?
The rise of alternative finance in the last few years is now a popular and trusted form of lending, however, awareness amongst business owners of these new funding options remains low. Peer-to-peer lending and invoice financing platforms are increasingly providing SMEs with funding solutions that use technology to offer speed, transparency and flexibility.
Invoice factoring companies typically offer their invoice purchasing services to companies with an annual turnover of at least £50,000, although some will consider start-ups and smaller businesses. A business can typically borrow up to 85-95% of the value of their invoices. Several different types of providers offer factoring or invoice discounting facilities, including banks, financial institutions, independent providers and invoice discounting experts such as Populous World, which auctions invoices to global investors. The auction process provides invoice sellers with a range of competitive offers and bids around the globe from individual investors.
The Populous World auction model appeals to a multitude of SME’s as it means they can select which customer invoices they would raise finance for, and would only incur fees when they need to use it. The platform offers flexibility where you can choose to discount the invoices based on your needs.
>> 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.