Invoice finance is not a new concept and has actually be used for hundreds of years in some form. Nowadays, it is used by thousands of businesses of all shapes and sizes, globally as a reliable means of generating working capital.
The reason that invoice finance Auckland has been a relatively niche product for many years is that in the grand scheme of things, only a small part of the small to medium businesses could be benefiting from the cash flow that it provides. Well, since 2008, we have seen significant growth of the economy and this leaves one question- is it time for your business to consider invoice finance as a way of funding your operations? Well, perhaps it is high time and here are a few reasons why we think so.
It is Easily Accessible
Even though invoice finance Auckland is hardly thought as the last resort, it is widely considered as a mainstream product by advisors and funders alike. That’s because unlike conventional funding options such as loans, there’s less emphasis put on the historic financial performance of the company as well as the strength of the balance sheet when the funder is considering an application. Their main concern is the asset that they’re securing the loan against, which is the receivables, as well as the quality of the management team running your company.
We are in a very competitive market with independent consultants like Asset Factors and banks alike offering a wide array of solutions to match almost every requirement.
It Protects Against Bad Debt
Another primary benefit of invoice finance Auckland, usually one that’s overlooked is the protection it provides against bad debts. Each facility will have credit opinions of existing and new clients and this is usually enhanced by the payment experience of the funders.
By having an appropriate funding limit for each client, the funding company will restrict your exposure to clients that may be unable to pay.
It is a Flexible Type of Business Finance
Invoice finance Auckland is sales linked and this means that as your company grows, the available funds to you will increase. The funding facility will usually advance up to 90 percent of your outstanding invoices, so that when you generate more sales and give more invoices, the working capital at your disposal increases.
This is where this form of business finance really comes in handy. If you compare it with solutions such as a loan or overdraft, it is less restrictive and actually encourages growth.
It Saves Time & Money
Some forms of this kind of finance come with a collections service, which simply involves outsourcing your credit control tasks to the provider. Usually, the level of service provided can often be tailored to match your budget and requirements. The time saved collecting debts can be better spent on other important business tasks and removing a fixed overhead will certainly have a positive effect on the bottom line.
As you can see, there are several appealing benefits of invoice finance and it’s something you should consider when running a small to medium business.