How does invoice finance support business growth? 

At PMD, we champion growth without limits. We work with our clients strategically to help their business to thrive and reach the next level, and we believe that nothing should stand in the way of business growth. 

We believe that money is a commodity, whereas ideas and relationships are the real lifeblood of business. That’s why we’re always on the lookout for ideas and opportunities that our clients may not previously have known existed, which will help them grow and achieve more. 

Invoice finance is one of these ideas. This type of financing can have a significant impact on business growth, and help you maintain a steady cash flow. 

Let’s talk a little more about what invoice finance is, and how it can support business growth… 

Firstly, what is invoice finance? 

Invoice finance is a type of business funding which releases cash tied up in outstanding invoices, allowing the supplier access to money before the customer has paid.

Depending on the repayment terms offered, some companies can take months to settle what they owe. This leaves cash flow strained and suppliers left unpaid. With invoice finance, businesses pay a small percentage of the invoice amount to the lender as a fee for borrowing the money. This makes it a lower-risk loan option, as repayment is linked to the invoices that you raise, meaning repayment is always in conjunction with you having made a sale.  

Invoice finance for business growth 

Now let’s discuss some of the key ways that invoice finance can help your business to grow…

Steady cash flow

In order for businesses to grow, they need a steady cash flow. Maintaining healthy cash flow is a challenge faced by growing businesses in every industry who trade with clients on credit terms.  

In order for a business to keep growing and fulfilling their obligations to clients, there needs to be sufficient cash flow to maintain operations. Invoice financing can significantly benefit the way you manage your cash flow by bridging the gap between the point at which you make a sale and the time payment is received from the debtor. Invoice financing is an ideal solution as it helps to ensure that capital is available to pay wages and bills on time, even if an invoice hasn’t been settled yet.   

  1. Reduces time spent chasing debtors

In order for your business to grow, you need to keep acquiring new clients, as well as looking after the ones you already have. This takes time and effort, and should be a primary focus of any business owner. However, if your time is taken up by chasing debtors, it can be all consuming and can take up a lot of valuable time. Invoice finance takes away the need to chase debtors, freeing up business owners to focus on acquiring new clients. 

The reason for this is that invoice financing reduces late payments from customers and the risk of bad debts which can cripple a business. Invoice financing lenders will conduct a credit check on your debtor, and they often take out insurance against non-payment. Invoice finance lenders know how to deal with customers who are likely to make their payments late or fail to pay completely, and they know how to recover the funds. This takes all the worry away from you as the business owner and allows you to focus on growing your business.   

  1. Flexibility for credit lines

Looking after existing customers can be just as vital to business growth as acquiring new ones, so it’s good to be able to be flexible with loyal customers if required. Invoice finance allows a business to extend credit lines to its loyal customers who require credit facilities.  

  1. Easier to pay suppliers

Invoice finance makes it much easier for your business to pay suppliers, due to the fact that you are not reliant on debtors settling an invoice in order to receive payment. Consequently, this means you can avoid supply chain constraints and your business can enjoy steady growth.  

It also allows the business owner to focus on marketing their business rather than fending off creditors, which can help to grow your business while competitors who are facing funding problems flounder. 

How to apply for invoice finance 

If you are interested in securing invoice financing for your business, but are not sure where to start, an experienced financial facilitator can help. 

PMD have been securing invoice finance for their customers for years, and work with businesses across all types of sectors to help facilitate their growth. 

PMD has access to over 50 invoice financing companies in the Invoice Finance market. PMD’s dedicated team will take the time to understand your business and find the right funder to support your growth plans. 

If you already have an existing Invoice Finance facility, PMD can benchmark this against what is available in the market and improve on this by either reducing costs or increasing funding, and in many cases both. 

If you’re interested in invoice financing and would like to discuss this further, contact PMD today for all the information and advice you need. We go above and beyond to understand our customer’s business and provide them with the best solutions. Together, we grow.  

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