Invoice discounting provides businesses with an injection of cash by leveraging their accounts receivable, ensuring cashflow without notifying customers. This method is crucial for businesses facing late payments, allowing them to continue operations smoothly. Time Finance offers flexible support, including Selective Bad Debt Protection and XTRA Time facilities, which help businesses access additional funding beyond their existing agreements.
Invoice discounting has several advantages. It allows early release of funds, which is crucial for maintaining cashflow. Businesses can receive up to 90% of the outstanding invoice value within 24 hours, offering a significant speed advantage over traditional finance options. Transactions can be kept confidential, preserving customer relationships. Additionally, this method provides opportunities for businesses to pay suppliers early or invest in expansion, thus fuelling growth without relying on customer payments. Time Finance also offers optional Selective Bad Debt Protection to help businesses avoid bad debts.
However, there are some disadvantages to consider. Providers charge fees for using the invoice discounting facility, though these fees are usually discussed upfront. Businesses may also be liable if a customer fails to pay their invoice, as the funder has already provided the agreed prepayment value. Credit checks are necessary, which may affect a business’s credit rating. Lastly, invoice discounting might not be ideal for small businesses with a turnover of less than £100,000 per annum, as the costs could outweigh the benefits.
Invoice discounting is a valuable funding solution for businesses that wish to manage their own credit control functions. It helps unlock cash tied up in unpaid invoices, providing much-needed liquidity. By utilising existing assets, SME owners can access finance without resorting to additional loans or credit cards.
Time Finance offers tailored invoice finance solutions, ensuring businesses have access to additional working capital when needed. This funding can be the difference between a business growing or standing still, helping enterprises make the most of every opportunity that comes their way.
In closing, businesses facing cash flow issues due to late payments should consider invoice discounting. It offers numerous benefits, including early access to funds, confidentiality, and growth opportunities, though it’s essential to weigh these against the associated costs and potential liabilities. Contact Time Finance for expert guidance on the best finance solutions for your business needs.
Time Finance plc (LON:TIME) is an AIM-listed business specialising in the provision or arrangement of funding solutions to UK businesses seeking to access the finance they need to realise their growth plans. Time Finance can fund businesses or arrange funding with their trusted partners through Asset Finance, Invoice Finance, Business Loans, Vehicle Finance or Asset Based Lending.
