Invoice Trading By MarketInvoice
Nobody wakes up in the morning thinking ‘I need invoice finance today!’, but you might wake up thinking your business needs cash, or even that you need a loan. In the UK maintaining a healthy cash flow is one of the main difficulties businesses face.
Invoice trading could be the answer. In many ways invoice finance can be a great tool to keep your business either ticking over or if you’re ambitious and seeking growth in can help with that too. However, navigating this sector of finance can be scary – you’ve got to know what to look out for and how to get the most out of it.
With so many different types of invoice finance being offered, negotiating for invoice finance is often regarded as a real headache – it’s an industry that can be laden with jargon and hidden fees.
First off though, what is invoice finance? It’s a form of short-term borrowing that allows a business to access funds against its sales before the customer has actually paid. The UK has the largest invoice finance market in the world – it is estimated that £14bn of invoices are funded at any one time.
When it comes to a growing company, cash is king. Failing to accurately forecast and manage your cash flow can quickly turn in to a nightmare – killing otherwise great businesses.
Increasingly long and late payment terms from customers can exacerbate the problem – and that’s where invoice trading comes in handy.
Of course there are many variables, but generally your business will be eligible for invoice finance if it meets these two basic requirements:
- You provide services or sell products to other businesses, not just to individuals.
- You collect money from your customers paid on terms, using an invoice system which raises invoices in arrears, after the goods have been provided.
Is it right for me? Most young businesses experience times when they have used a lot of cash to fulfil an order for a customer, and a long wait for that customer to pay can create a real challenge for businesses. In today’s climate of long and late payment from large customers, and with banks less likely to offer loans and overdrafts, this challenge can prevent growth and hold back delivery of the next big order.
Article contributed by: MarketInvoice
Our mission at MarketInvoice is to make the world of finance more efficient and transparent for small and growing businesses.
At MarketInvoice, we aim to cut through the jargon and clear the air around pricing.
The speed of growth and innovation in FinTech and alternative finance has been phenomenal in the last two years. London’s FinTech sector attracted record levels of investment in 2014 and now outplays New York and Silicon Valley in terms of employment. With an unrivalled combination of talent, connectivity and status as one of the world’s leading financial centres, London is uniquely placed to drive innovation in this sector for years to come. As the fourth largest peer-to-peer lender, and the largest peer-to-peer invoice finance provider, we are at the heart of this drive bringing the world of finance into the 21st century.