Cashflow and debt management are key elements to the success of any business in a growth phase.

Cashflow and debt management are key elements to the success of any business in a growth phase. Turnover growth can place a severe strain on Cashflow. Orders come in, the goods are manufactured and dispatched, and then, the long wait for payment begins. “Oh great, a sale” is all to often replaced with “will this company pay up and when?” Surges in demand, investment in new stock, plant & equipment, and staff are to blame for draining cash resources. For many businesses, the only way out is to liberate cashflow on the strength of an order book rather than a balance sheet. How? Invoice Finance, a source of business finance in the UK for the past 35 years.

Invoice Finance is one of the more flexible, low-cost options for businesses looking for additional working capital, by releasing, up to 85% of an outstanding debtor book, immediately. Credit sales become cash sales; the more you sell, the more an Invoice Financier makes available, helping cashflow become more predictable and sustainable through a growth phase. To mitigate the every present threat of bad debts often Invoice Financiers, can provide optional bad debt cover and peace of mind.

Recent developments have seen some Banks integrating Invoice Finance, seamlessly with traditional products such as overdrafts and term loans etc. providing the Bank with the ability to “package” the right facilities for the right circumstances.

Put simply, Invoice Finance either disclosed or undisclosed can guarantee cash flow to a business. In return, it demands a certain amount of discipline as to whom the company extends credit too. But at the end of the day, it often means the difference between a business surviving strong sales growth or calling in the liquidators. As John Harvey-Jones said, “cash shortage is self accelerating and hits with the speed and destructive force of a typhoon”. 

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Factoring, in one form or another, has been around for thousands of years. Factoring releases the funds locked up in outstanding sales invoices, is a sure-fire way to turn your outstanding debtors into cash. Factoring is frequently used by businesses to improve cash flow. It can also be used to decrease administration expenses.
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