We often find ourselves asked how to get paid quicker, or paid at all, without going down a route of factoring.
When we ask why not use factoring the answer is commonly that ‘my clients won’t like it’ or ‘my clients like to deal with me’, at which point our answer is a simple OK. What many businesses don’t realise is that you can have the best of both worlds. You can seek finance against your invoices and retain control over who chases for payment, in fact the whole thing can be completely confidential, so your client will never know.
I’ll Use My Overdraft Instead?
If you have an issue with debtors then you could use your overdraft facility to fund your cash flow, however be aware that your overdraft is unlikely to increase in line with your debtor book. Also remember that an overdraft is ‘On Demand’ which means your bank will renew the facility at least annually and may withdraw it at any time. Your bank will also have a limit at which they will no longer wish to increase your overdraft, or may want additional security to support it.
Doesn’t Invoice Financing Cost a Lot?
Its all relative really. If you are invoicing more and cash is starting to become an issue then prioritise. Having no cash is a potentially terminal problem for a business, therefore what is the true cost of invoice finance?
The bottom line is it probably doesn’t cost as much as you think, and if it can be done confidentially then you have future cash flow, finance that tracks your sales, no overdraft to worry about, and your clients know no different.
Please leave your comments below, or if you want to know more then get in touch via the website, or call us on 0844 682 1462
We are always happy to chat.