For many businesses, finding the cash to invest in new projects or take on new employees can stump financial growth.
The day-to-day costs of running a business don’t necessarily line-up with the money coming in from selling products or services.
Therefore, businesses rely on various financing options to get their hands on fast cash. Whether it’s taking out bank loans or racking up a hefty credit card bill, most solutions involve long-term commitments and charge high interest on repayments.
Increasingly, however, businesses are discovering how single invoice financing can solve their cash flow problems without breaking the bank.
So, what is invoice financing, and how can it help your business maintain steady cash flow?
Join us as we explore the benefits of single invoice financing to accelerate the growth of your business.
Why Is Cash Flow So Important?
Before we get into the finer details, let’s take a look at why getting your hands on quick cash is important for your company.
As modern businesses have become increasingly reliant on outsourced business models and white-labelling their services to third parties, paying rolling contracts can quickly add up.
If your business is continually having to put money to the side to keep things ticking over, you won’t have the funds required to invest in new projects and push your business to the next level.
Cash flow is the amount of money coming in and out of your business at any given time.
To maintain positive cash flow, you need your revenue to be consistently higher than your overheads. While this may seem obvious, if you break things down into monthly or weekly periods, you can begin to see where problems arise.
Lots of businesses will have a net positive income over the year, but within this period, cash availability can be incredibly volatile.
Also, positive cash flow doesn’t necessarily mean your business will turn a profit. If cash flow is too high, you’re not making the most of the resources available to you. You can use the extra cash to purchase additional stock or employ more salespeople.
Managing your cash flow helps avoid temporary blips in cash flow to maintain a steady stream of money throughout the year.
Steady cash flow will give your business the capacity and confidence to stretch its wings and reach its full potential.
How Does Invoice Financing Work?
So, you’re looking for a way to access some quick cash, but you don’t want it to cost you the world.
One of the fundamental problems with traditional financing options is if your business needs to use them, they’re usually strapped for cash as it is. Therefore, you probably can’t afford expensive repayment costs for the money you don’t have.
If your business relies on high-interest loans, overdrafts, or credit cards to stay afloat, you risk entering a downward spiral of debt.
However, it doesn’t need to be this way.
Single invoice financing gives you the flexibility to choose when you receive funds from unpaid invoices. Instead of borrowing money, you receive the money you’re already owed ahead of time.
This way, the repayment costs are significantly lower, and your business doesn’t enter any long-term financial commitments.
Most financing options will only offer your business advance payments if they agree to lock into long-term contracts. However, with single invoice financing, you can choose to receive advance payments on selected invoices. There’s absolutely no obligation if cash flow is looking healthy.
To paint a simpler picture, let’s use the example of subscribing to a gym membership:
Imagine you want to join a gym, but you’re not sure whether it’s something you want to continue long-term…
The gym offers two membership options:
- Option A: Pay £240 upfront for 12 months membership (i.e. £20/month).
- Option B: Pay £30/month and cancel whenever you like.
From an accountant’s point of view, option A might sound like the smarter option. However, if you’re only going to use the gym for the first couple of months, you’d be better off with option B.
If we compare this to running a business, you might only want to borrow money to tie you over for a specific period. Why subscribe to an expensive long-term loan for a quick fix?
Similarly, why would you pay a premium to receive money, just because you don’t want to commit to a long-term agreement?
Single invoicing offers the benefits of both options A & B — get your hands on quick cash without paying a premium.
Pretty great, right?
Your business can enjoy the freedom and flexibility of quick one-off advances with zero commitment.
Invoice financing is an asset-based financing solution which looks at your invoice statements to determine your forecasted income before it enters your bank. Unpaid invoices can leave your business in limbo for months and dry-up cash reserves.
Don’t let your business grind to a halt. Enjoy quick access to liquid capital to inject vital funds into the areas of your business that need it most.
What are the Advantages of Single Invoice Financing?
If you’re still on the fence about using single invoice financing to boost business growth, take a look at the three key advantages of financing compared to traditional options.
1. Receive advance payments on selected accounts
If your business is struggling with cash flow, it doesn’t necessarily mean that there are problems with money across the entire company.
Many businesses will have steady inflows and outflows of cash in most areas of their business, but struggle to make ends meet with one or two tricky accounts.
Whether it’s taking on an account that’s slightly out of your comfort zone or dealing with a picky client who wants to structure payments in a certain way, some accounts are more cash-tight than others.
Unlike most financing options, single invoice financing allows your business to receive advance payments on individual accounts. If things are ticking over nicely in other areas of your business, you can oil the stiffer cogs to keep the whole machine running smoothly.
2. Enjoy quick cash
Unlike most business loans, the best single invoice financing providers will give you cash on the spot.
When money is tight, there’s almost always a time pressure to make a payment before incurring additional fees. The best financing providers will take you through a quick and simple approval process to give you money quickly.
Customers can apply to Lendflo in minutes and get their hands on vital cash in seconds.
3. The customer is in control
While most banks will lock you in with nasty long-term contracts and hidden T&Cs, single invoice financing puts you in the driving seat.
Invoice financing gives you the freedom to choose how you manage cash flow and when you would like to bring in some extra cash.
Don’t let big banks or greedy loan sharks take control of your finances. Enjoy the flexibility of one-off payments on selected accounts to maintain steady cash flow on your watch.
How Much is Invoice Financing?
Unlike most business credit cards which can charge anything between 15% and 23% APR, single invoice financing offers incredible value for money.
With Lendflo, customers can enjoy fees from as little as 1% per month of the invoice value..
Don’t let your business fall into uncontrollable debt with high-interest loans, or worse still, unauthorised overdraft payments which can be up to ten times higher than payday loans.
Choose single invoice financing to keep costs to a minimum and inject money into the areas of your business that need it most.
Take Back Control of Your Business’ Cash Flow with Lendflo
Here at Lendflo, we aim to take the pain out of cash flow management with a clear and straightforward approach.
Stop waiting months to get paid and receive funds in seconds. Our smart digital platform integrates with leading accounting software for a stress-free application process.
We harness the power of machine learning to understand your business’ individual needs and offer rates you won’t be able to turn down. Enjoy fast cash for outstanding invoices before customers have even paid them.
Help your business stretch its wings and reach its full potential with Lendflo.