Invoice finance makes all the difference to your company’s growth, helping with forward planning and maintaining a steady cash flow. This blog explores the benefits of working with an invoice finance company, along with advice on how to choose the right lender for your business, to keep operations moving and prevent financial holdups.
What Does an Invoice Finance Company Do?
An invoice finance company lends businesses funding based on their unpaid invoices. This allows companies to access funds quickly rather than waiting for customers to pay. Invoice finance is a way for businesses to get paid faster for the work they’ve already done, with immediate access to funds locked up in invoices.
Invoice financing is a great short-term borrowing solution, with the finance company advancing a percentage (usually 70-95%) of the invoice value upfront, usually within 48 hours.
Key Considerations to Make
If you’re wondering how to choose an invoice company, here are some key considerations to guide your decision.
Specialties
Some lending companies specialise in providing funding for businesses in particular sectors. It’s a good idea to carry out appropriate research on the experience of the company to find the best invoice financing company for your needs.
Fees
Before working with an invoice financing company, you need to consider all the costs associated with the service, especially fees. These fees are often a percentage of the invoice value or a flat monthly rate. Before committing, weigh up the costs of this service to make sure it’s aligned with your budget.
Limits or Restrictions
Some invoice finance companies in the UK have restrictions on funds based on their customers’ reputations; payment histories may be looked at during the consideration process and lenders base funding on how likely your customers are to pay.
Additionally, some invoice financing companies may also have restrictions on working with companies that meet a certain turnover each year.
What Businesses Are Suitable for Invoice Finance?
Invoice finance is a versatile funding option that benefits businesses from a wide range of sectors. Here at Pathfinder, our services provide solutions for stability and growth, and we work with companies in:
- Construction
- Haulage
- Manufacturing
- Printing
- Temporary recruitment
- Wholesale
Banks vs Invoice Finance Companies
Invoice finance companies in the UK offer several benefits over traditional bank loans. It usually gives faster access to cash and doesn’t require the same level of requirements as bank loans, such as research into the business’s credit history. Instead, the creditworthiness of the customer is looked at.
Finance lenders usually have a smoother application process with more flexible funding options that can be adjusted as your business grows, rather than with a fixed-term loan from a bank. Take a look at how we’ve accelerated growth for your clients through our case studies.
Ready to Enquire?
For instant access to the cash you’re owed, work with Pathfinder to help you find the perfect invoice financing company to ensure financial stability. Support your company’s expansion and get in touch with our team by booking a call or completing our quick contact form.
