In the current competitive business environment, small businesses may struggle to sell their products or services on credit terms. As a common practice, providers tend to give their customers a comfortable payment cycle as 30, 60 or 90 days to honour the invoices raised.
In fact, this is a good way to gain more customers and grow business, but it can also be troublesome when your business doesn’t have enough funds to meet the working capital and day-to-day expenses on waiting for the customers to pay the invoices.
How can small businesses benefit?
Invoice finance also known as debtor finance allows the small businesses to sell their sell their products and services to the customers on the industry best payment terms.
However, they need not have to worry about their further access to sufficient funds to meet the operations or inventory costs.
The general advantages of invoice finance for small business are as follows:
- Small businesses can receive cash instantly as the invoices get raised and sent to the customers. This will expedite cash flow without any gaps.
- Growing businesses can use the funds to their ATO or payroll obligations.
- This approach may also help to purchase any equipment or plant or to re-invest in business expansion.
- There is no need for any brick and mortar security or other collaterals for fund advance.
- The facility is available as long as your business needs this product and also can be custom tailored to fit your various business requirements.
- No early repayment penalties or exit fees as in case of loans.
- No annual fees, subscription cost, or other hidden costs.
- The approval and fund release process is fast and simple.
- In most of the cases, applications are processed within 48 hours.
This is crucial for the small and growing businesses, for whom small business invoice financing can be a handy solution. Invoice financing can solve the fund-flow gap issues for business by enabling the payment as soon as the invoices are raised.
There are many options from single invoice financing to selective invoice financing for small businesses to rely on.