Cash flow is pretty important. Let’s face it, if you don’t manage it well then you’re not going to be around too long! One of the most important roles as an advisor is to ensure your client maintains a positive cash flow, especially if they’re a newly established business or they’re experiencing a high growth period. Traditionally, SMEs have looked to banks to help cover these gaps. But let’s look at the growing market of invoice finance and why an increasing number of SMEs are turning to this alternative.
1. Not having a trading history isn’t an obstacle
Invoice financing is only partly based on the SME itself, so not having much trading history doesn’t need to be detrimental. Because the risk assessment is also based on the debtor, this makes invoice finance especially useful for start-ups, who typically don’t have an established trading record and can’t access funding from the banks. It’s also great for established businesses who are experiencing a growth period and need some additional working capital. The larger and more reputable the debtor, the lower the cost of finance.
2. No need to gamble the house
A common requirement of commercial overdrafts is that the director’s put their property, be it personal or commercial, up as security. With invoice finance the value of invoices is what secures the financing, which means a lower personal risk.
3. Get the advantage of instant funding
Instead of waiting months for approval from traditional lenders, SMEs get the competitive advantage of same-day funding with platforms such as Timelio. This means they can immediately invest in the business growth they need to overtake the competition and future cash flow isn’t tied up in a monthly loan repayment fee.
4. No sign up fees, account fees, or lock-in contracts
That’s right. With providers such as Timelio there are no fees for signing up, no account fees, and no lock in contracts. That means no hidden costs for getting that finance. Just a simple, easy to use platform. Upload the invoice to be financed and monitor the funding process as it happens, giving the SME complete control.
5. You can add another string to your bow
Yes, invoice finance is a benefit to you as well. You can take advantage of the fact that you are diversifying your service options and are now able to offer an alternate finance solution to your SME clients. No more “Try your luck with the banks” to help your clients get the working capital they need to fund growth.
There you are, 5 good reasons to offer your clients innovative finance solutions. To find out more about why invoice finance is a better alternative for your SME clients, call 1300 FUND MEor contact us.