Cashflow management tasks like overcoming payroll challenges, getting supplier payments out on time, and other things, can easily be overwhelming for a business. This is especially true if your industry or the economy is experiencing a downturn. These days, accessing capital isn’t as easy as it used to be and many are finding ways to cut costs while also facing unique cashflow challenges.
Since such challenges impact a business’s daily operations, many are searching for funding services that provide short-term funding solutions that they have more control over, like invoice finance.
Here, Selectpay highlights how invoice finance can be your secret weapon when it comes to cashflow management!
PROs of Invoice Finance for Cashflow Management
- Fast Access to Funding: One of the foremost benefits of invoice finance solutions is that they offer fast access to a funding source. You’ll be able to receive the funds often, within 24 hours of sending in your invoice.
- Improves Cashflow: Invoice finance helps improve cashflow by minimizing the gap between the time your business initiates an invoice until a customer pays it. It also provides more efficient funding for accounts receivable and any last-minute payments.
- Easily Accessible: For those in need of more accessible funding options and alternatives to bank loans, invoice finance is key. Most businesses will find that it’s much easier to qualify for and receive funding in a short amount of time.
- Scalability: Invoice finance solutions grow with your business, making it an easily accessible and reliable funding source. Moreover, it’s very scalable as it grows with you as your company expands and your cashflow needs change.
- Saves Time: Once set up with Invoice Finance, you can seamlessly get paid for your invoices upfront. This frees up valuable time and resources better spent elsewhere.
- Extended Payment Terms: With invoice finance, you can extend your payment terms and still remain financially stable. This can help you attract new business and clients looking for more flexibility when it comes to payments, without sacrificing cashflow.
- No Need to Put Down A Security: Often, for large loans or fast cash from banks and other lenders, a business is required to put down some sort of security., This can be a property or another asset and it ensures that the lender doesn’t lose out on their investment. However, invoice finance is an unsecured lending solution and doesn’t require this at all.
CONs of Invoice Finance for Cashflow Management
- Liability Issues: If for one reason or another, your customer is unable to pay their invoice, you will likely be held liable for the payment by your invoice finance company. This can certainly throw a wrench in things and add unforeseen costs that may be detrimental to a company already experiencing cashflow issues.
- Cost Issues: When investing in invoice finance solutions, it’s important to remember that it will affect your company’s overhead. This is because the solution you choose for invoice finance will take a fee when collecting payments. This will either be a percentage of the invoice value or in Selectpay’s case, fixed upfront plus ongoing management fees. In some cases, depending on the fees, you can even build them in your invoice. It’s up to you to decide whether the fees charged by your invoice finance service are worth the access to the upfront cash injection you’ll receive.
- Only Works for Commercial Invoices: Unfortunately, invoice finance solutions are only viable for commercial businesses that work in the B2B sector, rather than directly with consumers. This is because invoice finance solutions work on net terms. For companies dealing directly with consumers, other financing options exist such as bank loans and trade finance solutions.
Contact Selectpay for invoice finance solutions today!
With Selectpay’s invoice finance solution, you pick and choose what you want to fund when you need it and only pay for it as you go. This provides you with more control over your cashflow. This “pay-as-you-go” style of invoice finance makes it easy for you to find the perfect solution for all your cashflow management needs. With only a one-time invoice fee rather than having to pay monthly for services, Selectpay is easier and more transparent.