Invoice Discounting Cash Flow Solution: Overview

Invoice Discounting is a form of short term financing available to businesses (find out more here) especially for SMEs.  It provides a cash flow solution SMEs.

SME owners are often caught in a dilemma on deciding whether to take on the next project or next client due to cash flow constraints:

  • Will I have enough cash to pay for my suppliers?
  • Will I have enough cash to pay my employees?
  • When will my existing customers pay me?
  • What if I run out of working capital?

Thus to maintain a safe cash flow, some important and lucrative opportunities could be bypassed by the SME.

Invoice Discounting Cash Flow Solution: Characteristics

Invoice Discounting is a versatile and efficient source of cash. It allows SMEs to have a much better control of their cash flow. SMEs can raise immediate cash by auctioning their outstanding invoices.

1. Control / Speed: SMEs can sell their outstanding invoices to obtain cash/working capital as and when they need to. Furthermore, the cash is disbursed quickly (InvoiceInterchange can advance cash to SMEs within 24 hours). This can be a crucial life-line for the SME when faced with a sudden short term cash flow need.

2. Flexibility: ability to raise different amount of funds be it a large or small sum and at any time to suit the SME’s needs at that particular point in time.

SMEs business relationship with the invoice discounting firm remains confidential allowing the SMEs to continue to strengthen their relationship with their customers. Through, invoice discounting, SME management can be relieved from distracting but nevertheless crucial cash flow issues and be able to fully focus on efforts to grow the business.

Invoice Discounting Research (UK SME)

Nesta (University of Cambridge) UK studies have shown that the key reasons that UK SMEs use Invoice trading (online invoice discounting) is because speed, control, ease of use and flexibility.

Invoice discounting, invoice factoring, invoice financing, benefit of invoice discoutning

 

Majority of the businesses who use Invoice Discounting / Invoice trading have shown strong growth. 90% reported higher profit / net income and 80% reported higher turnover.

why use invoice trading2

 

Invoice discounting cash flow solution – now a new alternative solution for SMEs. Do not miss out on this opportunity to grow your business. Talk to us to find out more how we can help you with our invoice discounting cash flow solution.

 

Reference

  1. Understanding Alternative Finance, The UK Alternative Finance Industry Report 2014, November 2104, link
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