What is Invoice Finance for Business & How Does it Work?

Maintaining cash flow and keeping up with payroll and other expenses, in addition to managing a business can often seem a little overwhelming. Especially small business, struggle with streamlining cash flow and payment processes, which is why many turn to an invoice finance business like Selectpay for help.


Here we offer some insight into invoice finance for small businesses and its benefits.


What Exactly is Invoice Finance?


In the simplest terms, invoice finance enables B2B providers to remain afloat by receiving cash advances on customer purchases, using their invoices as a form of collateral. For many businesses, invoice finance offers an easier and more reliable solution than applying for bank loans, which often require a portion of your business as collateral and can often take months to be approved.


How it Works


The invoice finance process is quite simple. Lenders will advance a sizeable portion of your outstanding invoice amount, then when that invoice is paid your business receives the remaining portion from the outstanding invoice. In most cases, invoice finance companies will charge a flat fee of the invoice value, although this percentage may vary.


Benefits of Invoice Finance for Small Business


For small business, invoice finance has a host of advantages including:


  • It’s Efficient: As mentioned above, applying and receiving approval for a bank loan can sometimes take months, whereas invoice finance offers an immediate solution for cash flow issues. In many cases, as little as 24 hours.


  • Ideal for B2B Companies: Companies that are B2B or experience a seasonal fluctuation in business and need to scale back, when necessary, will benefit from invoice finance. This is because it alleviates cash flow issues caused by unpaid invoices and enables businesses to keep up with vendor payments.


  • Ideal for Businesses of all sizes: Whether you’ve only been going a year and have a small turnover, or you are well established and turnover millions there is an invoice finance service to suit you. Whether it’s to manage temp payroll, fund large projects, purchase stock or simply stabilise cash flow invoice finance has got you covered.


Contact us today for more info about our invoice finance solutions!


Learn more about invoice finance for small businesses and buy now, pay later services by contacting us online today or calling 1300 566 229.