While the UK’s Small Business Commissioner is waiting for new government powers to punish bad payment practices many SMEs find it life-threatening these days to even wait for the usual 30-60 days to get paid.
More than ever, small businesses badly need invoice payments to manage cash flows, pay staff and suppliers, and cover tax and overhead costs. Let alone get new contracts or fund an expansion. Chasing after outstanding payments, few B2B businesses realise their debtor book represents an asset they can securely raise finance against.
In invoice finance, a lender jumps in and turns 70-95% of your sent invoice into cash, often within 24 hours. With invoice factoring, the lender then manages and collects the outstanding debts from your clients, and sends the remaining share of the invoice payment to you. With invoice discounting, you collect the payments from the customer.
What if you only needed help with liquefying a few bigger invoices a year, or wanted to focus your factoring on a particular season?
On-Demand Selective Invoice Finance
Spot factoring used to be reserved for larger businesses and was quite cumbersome to set up. However, on-demand invoice payment services now allow not just larger B2Bs but sole traders, freelancers, contractors, the self-employed and startups to decide about funding certain invoices with the click of a button. Typically, invoices are funded within 24 hours from application.
What Does Invoice Finance Cost?
At the start of your arrangement, lenders typically charge a service fee of 1% of turnover, and a 1.5% set up fee. When funding an invoice, debit interest of 2-4% over base rate is typically deducted. Some lenders also offer bad debt protection at competitive rates.
To discuss your business’ short term funding options and obtain the lowest cost solution, get in touch: bcacao@cc-finance.co.uk; 0774 776 7312.
"If you need to raise funds for your business or property have you spoken with your bank yet?" This is the first question I ask business owners, property developers and landlords. High street banks…
