When to consider invoice financing
When the decision is made to pursue an invoice financing
facility, the company should have a clear understanding of
its own goals, as well as the results expected from the invoice
financier. This will allow the company to take full advantage
of the comprehensive range of factoring or discounting services
available. Factoring and discounting is a particularly viable
alternative for a growing company and unlocking cash tied
up in a sales ledger.
In such a business environment, control is essential because
managerial and financial resources are constantly being challenged.
Invoice finance can ease cash-flow problems and provide some
predictability in a rapidly changing situation.
Invoice finance can also increase the availability of working
capital and alleviate cash-flow problems when a company takes
on new customers; gains new customers; experiences a slowdown
in collections; has increases in bad-debt levels; has heavy
capital investment program or just needs to cover unforeseen
cash requirement. An acquisition, for example, can expose
the firm to a new and unfamiliar customer base, thereby creating
a need for enhanced receivables management. And since granting
trade credit is comparable to making an investment in another
company, a factor's credit protection helps prevent unsound
investment decisions. Advantages
of invoice finance. For further information or a confidential
discussion contact us.
