The Business of Invoice Finance

The invoice finance business – now a $3 trillion-a-year global industry – can be traced to old trading practices and traditional financial arrangements. Fundamentally, getting paid upon completion of work rather than waiting weeks or months for customers to pay their bills, remains unchanged.

Imagine a manufacturer sending completed fashion items to a high street retailer, but the retailer won’t pay for the goods until they sell it. An invoice finance company, a third party with adequate resources will advance the manufacturer the money owed from invoices, minus a fee for taking on the risk of non-payment.

The basic principle of invoice finance is very simple. The manufacturer and the customer enter an agreement with an invoice finance company for early clearance of unpaid invoices.

The customer provides guarantee and verification for the clearance of the invoices on the due date, against which the invoice finance company extends credit of 80 to 95 percent of the invoice value, minus a small processing fee, to the manufacturer (invoice seller).
Once the due date for the invoice arrives and payment is made, the manufacturer pays the invoice amount to the invoice finance company.

What Invoice Finance Companies Can Offer

Populous World is an invoice finance provider that can offer a vital solution to cash flow crunches. There are numerous advantages for SMEs when adopting this service, particularly in this current economic climate where smooth cash-flow is more crucial than ever:

1. Release cash quickly – Most reputable invoice finance companies can provide you with 90% of the sales value of your invoices within 24-72 hours. This means you’re not left waiting around for individual invoices to trickle in, leaving you with the funds you need to successfully develop your business.

2. Free up your time – With advanced cash in your account, you can focus on actually growing your business and dedicate your time to core activities such as increasing your production and exploring new market opportunities.

3. Reduce administration costs – By balancing your financial incomings and outgoings, it allows you to cut back on the time and resources needed to administrate the financial management of your company, saving you time, money and allowing you to run your company more efficiently

4. An alternative to a traditional bank loan – Invoice Finance isn’t the same as taking out an overdraft or a business loan. Your credit lines automatically grow with your business, without the need for you to negotiate new terms.

5. Improve your revenue– Many businesses who use invoice finance services see a significant increase in their turnover, as they are able to use available cash flow to accommodate urgent or large orders. With Populous World, your sales grow with the funds that are released to you.

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

To explore these benefits further, why not call Populous World and discuss how invoice finance could improve your working capital. Populous World provides confidential invoice discounting for small to medium-sized businesses.

>> 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]

Disclaimer: Populous World does not offer investment advice and nothing in them should be construed as investment or financial advice.

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