- 24 May
Invoice Finance Can Provide More Adequate Start-up Funding Than Overdraft
Continuing to share the findings of our survey of 100 randomly selected new start-up businesses, we asked them if they were able to raise all the funding that they wanted initially, when they first started business.
Of the 52% of new start-ups that said they used overdraft, 44% of those said that they were NOT able to raise all the funding that they wanted initially, but unfortunately none of that segment even considered using invoice finance.
Although there were only 2 businesses in our start-ups survey sample that did use invoice finance, both of them said that they were able to raise all the funding that they needed initially through the invoice finance facilities that they had. This suggests that according to our sample of new start ups, invoice finance can provide a more adequate source of funding for start-ups than overdraft. This echoes an article about overdraft versus invoice finance that I published a while back that showed the results of a survey where we found that the average funding received from overdraft equated to just 2.6% of debtor outstandings against invoice finance funding which equated to an average of 42% (according to ABFA figures at that time).