Cash is the lifeblood of any business. The careful management of cash determines the success or failure of its growth and development. Maintaining a healthy cash flow is a challenge for a business establishment in any industry irrespective of its turnover bracket. One of the most important factors that determine whether you can maintain the momentum of your business is cash flow. Many businesses are unsuccessful because of inadequate cash. This is regardless of the fact that many customers owe them large amounts of debts.
Many businesses do not realise that their sales ledger could be a valuable source of working capital. Invoice financing bridges the gap between the point you make your sale, and the time you receive the payment for it. An invoice financing company in Brisbane like ABR Finance will release funds according to a pre-arranged percentage of sales ledgers. This can be arranged within twenty-four hours of raising your invoice.
Unlike other forms of financing, invoice financing is a flexible financing solution for any business organisation. This is regardless of its size and the type of industry in which it operates. Your business establishment could be entitled to this form of finance if you sell on credit to other businesses and issue invoices. The terms of payment for the invoices should be between thirty to ninety days.
The funds released from this form of financing create the necessary working capital for the growth of your business. This facility grows in line with your business. This means that as your business grows, you have access to more funds to invest in your business. This is why invoice financing is a popular form of financing for seasonal or growing businesses. There are two forms of invoice financing. One is factoring and the other is discount financing. Both these facilities are similar in nature as they release the necessary working capital for your business for the growth of your business.
How factoring work
- You make a sale and raise an invoice on your customer. You send a copy of this invoice to an invoice financing company in Brisbane like ABR Finance.
- The invoice financing company in Brisbane like ABR Finance releases funds equivalent to ninety-five percent of invoice value within twenty-four hours.
- The invoice financing company takes up the responsibility of credit control and recovering the amount from your customers.
- You will receive the remaining balance of the invoice value less the factoring charges.
The some of the min advantages of invoice financing are as follows:
- Your cash flows improve.
The most important advantage of invoice financing is that it improves your cash flow. You are in a better position to cover your business expenses.
- You can confidently extend your payment terms.
You can extend the payment terms of your customers to thirty and sixty days confidently as you get funds instantly.
- Easy qualification requirement
Unlike other forms of business finance, invoice factoring is relatively easy to qualify for as most companies have solid customers.
- Simple Application
Invoice financing has simple application process as compared to other forms of financing.
- Quick Funding
In invoice financing, the funds can be released within twenty-four hours of sending a copy of your invoice.
In the today’s business world, maintaining a positive cash flow is imperative for the success of any business. Invoice financing is a blessing for small and medium to grow and expand.