1 year ago

7 Ways Invoice Finance Can Benefit Your Business

Invoice finance can be a great way to improve the financial situation of your business. It allows you to unlock funds caught up in unpaid invoices for a fee paid to an invoice financing company. We've put together a list of 7 ways invoice finance can benefit your business. As always, we recommend comparing offers before making a decision.

1. Improve Your Cash Flow with Invoice Finance

One of the more obvious benefits of invoice finance is that it can improve your cash flow. Unpaid invoices are often a frustration for businesses, interrupting your cash flow. Put simply, you can tap into the funds locked up in unpaid invoices.

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2. Approach Growth with More Flexibility

Invoice finance is funded against your sales ledger. Because of this, even if you choose to increase your use of invoice finance, your sales ledger will still grow. This gives your business more flexibility when approaching growth and development opportunities.

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3. Meet Your Tax Obligations

Your business will have many outgoings it needs to cover, but ensuring that you meet your tax obligations is one the most important. Unfortunately, HMRC won't appreciate that you're due money from unpaid invoices in the light of unpaid taxes. Through an invoice finance company, you can release the revenue trapped in these unpaid invoices by paying them a fee.

Alternatively, you could consider taking out a business loan to meet your tax obligations. At BusinessComparison, we help you quickly and easily compare tax loans from a range of lenders.

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4. Reduce Payment Delays

Whether your business is new or well-established, it's likely that you've experienced issues with payment delays. These delays aren't just frustrating because they make it more challenging for your business to make payments. They can also interfere with any plans you have.

Invoice financing is an effective way of securing overdue funds for a fee. This way, you don't have to question whether you can afford to wait weeks or months for your customers to settle overdue invoices.


5. Improve Your Creditor Relations

If your customers are leaving you waiting for an unpaid invoice, they may be putting you in a position where you have to delay paying your creditors. Invoice financing can be a way of resolving this issue. You get to claim your overdue funds and pay your creditors, subsequently improving or preserving your relationship with your creditors.


6. Enjoy Better Credit Control

It may feel that you're at the mercy of your customers when it comes to lines of credit. While you may have agreements in place, if those agreements are broken, it can complicate things. Having better credit control is a useful asset for many businesses, and invoice finance can help support this.

It's also a way to gain better credit control. As well as using it as a fallback, invoice finance can act as credit insurance, affording you the option of saying yes to customers with less favourable credit. This is because if they do encounter issues with payment, or if the company is under threat of closure, you should still be able to recoup your costs.


7. Save Your Business Time

At BusinessComparison, we provide our customers with a comparison service that has been designed to save them time. Subsequently, we fully appreciate time savings services, which is why we offer an invoice finance comparison service.

Beyond our service saving you time, you can save time with invoice finance too. Because another company is buying the unpaid invoice from you, you don't have to spend a lot of time chasing your overdue revenue. As an added benefit, you also don't have to deal with the uncomfortableness of chasing the invoice yourself.

Compare Invoice Finance Options and Grow Your Business

At BusinessComparison, our goal is to save your business time and money so you can focus on what matters; growing your business. Quickly and easily compare the best deals and offers on business essentials such as Bank Accounts, Finance, Insurance, Energy, Broadband and Payment Solutions today.

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Jon Cole-Dalton