Having cash flow issues and the stress of chasing invoices can be a lot for any business owner to have to deal with – especially in combination with one another. Business owners with a good client basis but who suffer from cash flow from time to time don’t need to worry. There are solutions available to you if you find yourself in a position where your outgoings amount to more than your incomings because of unpaid, outstanding invoices. Flexible invoice discounting is just one of the solutions that can help your business out in the event of a tricky cash flow situation.
What Is Flexible Invoice Discounting?
Invoice discounting is arguably one of the simplest forms of invoice finance; the concept allows you to release funds against your sales ledger. It offers you the chance to improve your cash flow situation and smooth out your working capital when things are starting to look a little bit worse for wear.
As is the case with other types of invoice finance, flexible invoice discounting involves the selling of unpaid invoices to a lender, who provides you with a cash advance to a specific percentage of the invoice’s value. The lender is given information that makes them aware of the fact that you are owed a particular sum of money, giving them the security needed to offer you an advance on this due.
What Are The Benefits Of Flexible Invoice Discounting Over Other B2B Finance Products?
Flexible invoice discounting has the obvious benefit of being a flexible facility. You are able to dip in and out of the facility that you set up as you please. It is a confidential service which means your current client base will not be made aware of the fact that you are using a financial advisor to aid your cash flow. Therefore, you can continue working with these customers are you would normally do.
With flexible invoice discounting you are still responsible for chasing any delayed payment of outstanding invoices. This is unlike invoice factoring when the factoring firm completes the chasing of payment. Flexible Invoice Discounting allows you quick access to cash. A successful application can normally be issued within 24 hours which is a much faster way of securing the cash you need than a product such as cash credit.
Furthermore, flexible invoice discounting can be applied for without the need for assets to be placed down as collateral. The security lies in the invoice you have passed over to the lender.
Am I Eligible For Flexible Invoice Discounting?
With all this in mind, if you’re interested in accessing some of the money held in outstanding invoices through flexible invoice discounting, then GapCap are here to help. However, there are a few requirements that you must meet to be eligible. Firstly, your business must be registeredas a UK Limited Company – it’s not enough to be a sole trader, for instance. You must also ensure that you have at least five or more business-to-business (B2B) debtors on credit terms, giving the lenders that assurance that you are a financially viable option for them.
If you find yourself in a position where you have a need for an advance on the money owed through unpaid business invoices, then we may well be able to provide you with the right service – drop the team a line at firstname.lastname@example.org to talk more about your cash flow needs.