Telltale Signs That You Should Consider Single Invoice Finance

Raising funds for your business is no easy task. In fact, having a business is no child’s play! Time, effort and not to mention capital, has to be put up. Before any profits are realized, so much work has to be accomplished first. As the old adage goes “No pain, no gain”. This holds very true for the corporate world. Capital, both monetary and industry wise, have to be put up.  Industry is all about finding the right people with the right talents for the job. Money is something that’s a little trickier than it sounds. Raising capital before putting up your company is one thing. Raising capital while on business is another. To help you with that here are some telltale signs which could mean that it is time for you to consider going into single invoice finance.

business losing“I hope my customers pay in time and where possible earlier…”

Not all purchases are made through cash. Some are made through credit. In some cases you want your customers to pay earlier but that is not completely possible. To recognize the value of your receivables, you can advance them through invoice finance.

“My bank loan is taking too long and is very restrictive and burdensome…”

Commercial business loans normally take long before approval. This makes them the least likely option for urgent expenses and disbursements.

“If we had more available cash, growth and expansion could be quicker…”

Because cash is often tied up in the invoices, they are unavailable for use for certain corporate ventures like expansion and purchase of new and better equipment.

“We have had a lot of opportunity loss lately…”

Opportunity losses are those that you incur when you fail to act on a particular prospect which could have increased profits. Lack of funds is often the biggest contributor to this.

“Our business partners do not like putting their personal assets up for collateral…”

Loans will always need collateral, both corporate and personal assets. Some investors and business partners do not like putting their personal resources at risk. Single invoice finance does not require your assets as collateral.

“We went into a nosedive during the previous period but now that things got better, we need funds to better operations…”

Single invoice finance will also prove beneficial for companies who have suffered losses and are slowly gaining back their profits. This is because most banks will not lend when they find you financially distressed. Invoice finance providers have no problem with this as they are concerned not on your financial status but that of your customers. Do remember that this is not only limited for use to losing businesses as it has in fact been employed by established ones due to its benefits.

 

7 Reasons Why You Should Consider Single Invoice Factoring

We’ve all known the different financing methods obtained by companies such commercial loans and receivables financing. Under the latter, two types can spring forth which are discounting and factoring. One common and popular type of the latter is what we call single invoice factoring. What is it?

It is frankly the same as the traditional type. It provides the same effects and has the same benefits. The differentiating factor is in the number of invoices. With whole turnover o traditional factoring, you sell your entire sales ledger thereby

1. It is quick and simple.

single invoice factoring ukWhen you need funds, especially in emergency situations, you want a process that is simple, crystal clear, easy and not to mention fast. If you need resources for expenditure due in five days then why would you go for a financing scheme that takes you a month before you get access to it? Single invoice factoring is simple and lighting fast. You can get hold of your needed funds in twenty four hours or less.

2. It can generate funds and therefore immediate working capital and cash flows.

Because of its swiftness, your business gets access to immediate working capital and a quick injection in the cash flow. This makes it easier for your business to pay suppliers thereby creating better relationships.

3. You release and get to use locked up cash.

You may have promising sales but the cash they generate may not be available to you. Also, you may have scored a particular sale but then you are not able to use its value. You’d have to wait out. Factoring can definitely hasten things up and you can advance the invoice’s value even before your customer pays.

4. You get to advance eighty five percent (85%) to ninety percent (90%) of the value of your invoice.

The remaining percentage to this will be forwarded only upon complete collection from your customers to whom the receivable is due. This remaining balance will then be less any fees.

5. It doesn’t require as much hassle as traditional loans.

You don’t have to provide quarterly and annual financial statements, asset listing, financial information on company owners, credit score and the like to the financial institution. This is because they will leverage not on your financial capability to pay but that on your customers instead.

6. It will not create a negative effect on your balance sheet.

Because it is not a loan, your balance sheet does not suffer increasing liabilities. In fact, you become more liquid as you can easily and quickly recognize and transform your receivables to cash.

7. It is cheaper and gives you more freedom than whole turn over factoring.

Lastly, single invoice factoring is far cheaper than the whole turnover type. You wouldn’t have to sell your entire sales ledger. You get to choose which invoice and when to advance its value.

Spot Factoring Requirements

If you haven’t borrowed financial resources for your business, then better read up. Unlike personal, home or car loans, spot factoring have a thing or two unique to them specifically on the spot factoring requirements.

1. Financial capability to pay corporately and personally.

commercial business loansBanks and other financial institutions will not lend you anything not even a cent if they can ascertain that you have the inability to pay what you will borrow. Financing is still a business after all. Besides as businessmen you avoid extending credit to your customers who may not be able to pay you in the future. The same goes with commercial business loan providers. They will check on your company’s current financial standing. They will ascertain how much assets you have to be used as collateral. This can even extend up to your personal assets.

2. A good current and previous credit score.

They will also look into whether or not you have other borrowings at present. At the same time, they will inquire regarding your previous loans, how timely you pay them and whether you actually pay for your dues.

3. Up to date, timely and accurate financial statements.

Yes, your financial statements are another requirement. Banks may ask you to submit quarterly, semi-annual or annual income statements, balance sheets, cash flows and all that. There are others who specify in their terms that your business must have a positive cash flow or that the ratio of your profit versus your expenses be at a certain number. Depending on the amount of your loan, the terms, your industry and other related factors, this requirement can vary.

4. Reliable and organized documentation.

Some lenders require you to initially submit three to five years of income tax returns and financial statements. Other corporate documents may be required. Even the personal financial records of the company’s owners may even be asked. At the same time, other forms of documentation will be required of you. This makes it a must that you maintain a safe and reliable file of all your transactions. Preservation is a must so go and do it. Even if you are not getting a loan, such is still required and mandated by law.

5. The patience to wait.

Commercial business loans with all its requirements, those not in this list included, can take quite some time before it gets you the funds that you need. This makes it a must that you plan things beforehand so that everything falls into schedule. Otherwise, you might as well consider other financing methods.

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