By Bibby Financial Services

Do you need to release cash to help drive forward your business?

A major concern for SMEs continues to be effective cash flow management and the ability to fund their ambitions – whether this is growth or simply the day-to-day running of their business.

Lending solutions to meet this demand have moved beyond the conventional facilities of overdrafts and loans and we are seeing the rise of more flexible types of funding such as Invoice Finance coming to the fore.

Businesses are undoubtedly attracted to the functionality of an overdraft, but this can have limitations for some trading businesses and does not link directly to the day-to-day receipts or potential delays in payments. Indeed, businesses that keep on top of their debtor book and late payments are reaping the benefits of Invoice Finance.

Invoice Finance is a key weapon in the arsenal of fast growing, entrepreneurial companies.

Debtor balances can be overlooked as a mechanism to fund those businesses which turn to traditional funding from banks. They are a huge asset for companies, but it can often take too long to turn these into cash. Invoice Finance can solve the problems of slow paying customers, shortage of working capital and protection against bad debts. It involves a business assigning its customer sales invoices to a finance provider that can typically advance up to 90% of the sales value – because they keep close to the asset and establish and protect its value.

Invoice Finance is being used more widely as a flexible way to raise funds because it frees up cash so you can invest or expand your business. It is a key weapon in the arsenal of fast growing, entrepreneurial companies and can represent a good strategic driver because it allows you to access funds on the strength of your asset base or the invoice due from orders. A good example of this can be seen in our TTM Healthcare case study.

So, whether you are looking to relocate to new premises, undergo a recruitment drive, tender for new contracts or acquire a new business, Invoice Finance can support your growth strategy. Given that the level of finance available is directly proportional to sales, funding should automatically increase as a business expands. This flexibility links into the attractiveness of Invoice Finance which is becoming more prevalent in today's market and becoming an important contributor to future business success.

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