How Businesses Find Invoice Finance
In order to understand how businesses find their way to use invoice finance we asked a sample of existing clients to answer this question: "How did you initially come to use invoice finance?".
This was the overall breakdown of the channels through which they found their way to these products:
- 51% - Bank
- 15% - Internet
- 15% - Accountant
- 12% - Broker
- 6% - Don't know
- 1% - Recommended by a customer
It is clear that the recommendaiton by the user's bank route is the most common. Often when the bank have been unable to provide an overdraft, as you will see from the comments below.
These are actual users of invoice finance quotes about how they found their way to use factoring or invoice discounting:
- "Accountant recommended it as my bank wouldn’t provide an overdraft as it was a new account".
- "Looked online as a colleague recommended it".
- "Looked online for business funding as had been turned down for overdraft as a start-up".
- "Lots of research online, never heard of invoice finance before that".
- "Online search, turned down for overdraft so was looking for alternative ways to raise money".
- "Recommended by a customer".
- "Searched online for small business funding".
- "Bank manager recommended it".
- "Accountant recommended it, so went to our bank".
The comments once again evidence how low the awareness of factoring and invoice discounting actually is. Often the process of even looking online appears to have been driven by a more generic search for business funding that has led to the user coming across invoice finance.
It is also sad to see that these flexible funding products are often being offered by the banks as an alternative to overdraft when it cannot be provided, rather than as a primary option in its own right.
Source: Study of 100 Invoice Finance Users February 2015