- 05 Jan
Accounts Receivable Financing A Patented Product
Getting financing when you have invented a new, innovative product can be difficult. We all see TV series such as Dragon's Den and The Apprentice where a very select few get to compete to get their ideas financed by those with the money to back them and the experience & connections, which can count for more than the money, in many cases when you are dealing with issues such as applying for a patent, producing prototypes, marketing and developing a supply chain.
Dragon's Den or The Apprentice?
For most people its much more likely that they will rely on their own savings, money from family or support from their bank, than qualifying for an investment from a Dragon. There are plenty of investors around that say that they have funds ready to help inventors, but in many cases that will result in them taking a stake in the company, which many would rather avoid.
Accounts Receivable Financing For Inventors
We were able to help an inventor recently with their working capital needs. This was without the need for them to give up any ownership of their company. The business had patented a design for an innovative product with the drinks sector, and they believed that there would be a good market for it. FundInvoice were able to introduce them to a selective invoice finance company that could provide accounts receivable financing against individual sales invoices that they choose. The funding would be made available immediately that invoices were raised, giving them an injection of much needed working capital. This type of finacing avoids the need to wait for customers to pay, before you can use the cash.
Whilst writing this I have just seen a piece of research suggesting that most SMEs rely on their invoices being paid to terms, in order to have sufficient working capital - the research went on to suggest that 6 out of 10 SME invoices remain unpaid past the standard terms - a cash flow headache for any business. This problem can be circumvented by using this type of finance.