So, you’ve received a new order that could lift your business to another level.
The problem is that you don’t have funds available to buy the materials and hire the staff you need to make the deal happen.
At this point, most business owners will tap on the bank manager’s door. If you have a profitable business with lots of company and personal assets your chances of getting a loan are good. (Have a look at this short video for 4 Tips To Get A Business Loan if you are thinking of going down that track.)
More than likely, it will be the cheapest money available, although it will take a while for approval to be given and you’ll be locked into a lengthy repayment period.
But, what if your business isn’t as profitable as the bank would like? What if you own a start up without assets? What if your personal assets are already committed and you have reached your borrowing limit? What if you need to get the job done really quickly and can’t afford to wait a week or two for the bank to make up its mind?
If any of the above scenarios apply to you then the debate over single invoice finance vs a bank loan clarifies. The best option you may have, other than quickly finding investors to buy into the company, is likely to be single invoice finance.
Such a facility will allow you to obtain the funds you need by using as security invoices you have issued to your customers which have not yet been paid. (Please note: this does not include overdue invoices),
Single invoice finance can offer many advantages over bank finance and we have listed ten of them below.
You can have a decision within 24 hours of applying and providing supporting documents.
There are no rigid guidelines. You can have a solution tailored specifically to your needs.
The application process is comparatively low doc compared with most banks.
In most instances, your home won’t be required as security.
Single invoice finance providers generally charge a single fee. You know it before you commit to the deal. There should not be application fees, account fees, exit fees, early repayment fees. You don’t pay the fee until the transaction is complete. In other words, when you get paid.
6. Start ups
Companies which have only been in business for a short time can be approved for funding as long as they have strong customers.
7. Credit History
A good credit history is always desirable, but you won’t be automatically be ruled out because of a blemish or two.
You won’t be saddled with long term debt. Once the invoice has been paid that’s it. Your obligation has ended. You can sell more invoices or not, but its up to you.
When you sell an invoice you are selling an asset. You are not creating debt. There is no reason for it to show on your balance sheet and shouldn’t effect existing borrowing.
As a short-term solution – and that’s what a single invoice finance facility is – it can be cheaper than a bank loan because you avoid all those extra fees.
Watch the videos on our home page to find out more about single invoice finance or complete the inquiry form on this page and we’ll contact you for an informal chat.