Have you ever had trouble paying your bills on time? Have you ever needed an extra $1000 to make payroll, only to find that there was no way for you to get a loan in time? Invoice financing may be the answer.
Small businesses can bundle their unpaid invoices together and sell them as one package at a discounted price with invoice financing.
This makes it easier for small businesses to access capital to pay their bills on time and avoid missing important deadlines. If this sounds like something that might work for your business, this article is for you.
So whenever you’re ready to delve deep into this important business topic, keep reading.
What Is Invoice Financing?
Invoice financing is the process of selling unpaid invoices to a third party (the “financing company”) at a discounted rate in exchange for an immediate cash injection. This can be particularly helpful if your business has fallen behind on its payments or needs some quick money to make payroll.
The financing company pays you upfront and takes over responsibility for paying off the invoice amount from your customer, usually within 12 months with no interest rates attached.
You’ll receive monthly instalments that you can then use to pay down other debts or invest back into your business as needed-but. Most importantly, you’re able to get paid without having any penalties added onto what’s already owed!
To qualify, businesses must have a good credit history and demonstrate that they’re profitable. Apply now!
Who Is It Good for?
Invoice financing is a great option for any small business owner, especially those who need extra cash to make payroll or pay down other debts.
If you’re a freelancer with overdue invoices that you can’t afford to settle right now, this might be the answer! If your company’s not making enough money and needs an influx of capital to stay afloat during these tough times-or if it just isn’t getting paid on time because its clients are struggling themselves-invoice financing could be perfect for you.
The important thing about invoice financing is that even though it does involve borrowing money, there are no penalties attached when paying off what’s owed. This means that businesses have complete control over how much they pay back while still getting the needed capital injection.
You may also want to consider invoice financing if you’re a company that needs quick access to capital for inventory. This is especially true if you don’t have enough money in your bank account and can’t get approved for any large loans right now.
Invoice financing is an excellent option because it gives businesses more flexibility than many traditional loan options out there.
Who Provides the Funds?
The financing company is typically the one that provides the funds for invoice payments. For example, if you have an outstanding invoice worth $5000 from a restaurant but only receive payment of $4000, it can be difficult to pay off your debt. With invoice financing, all they need to do is sell that unpaid invoices package and get paid upfront!
Most companies purchase these unpaid bills as part of “bundles”. These are packages of invoices grouped by similar criteria like business type or customer.
The average bundle size ranges between 50 and 200 invoices per group. The more bundles in total, the lower the price each invoice will go for.
This means that the financing company will pay you upfront for all of your invoices (minus a discount). They will take responsibility for paying off what’s owed to the customer.
The credit due date is usually about 12 months out, with monthly installments that can be used as needed. Most importantly, businesses no longer have any penalties attached to their debts!
Which Invoice Financing Type to Get?
There are two main types: factoring finance or ACH/EFT. Factoring involves sending an “IOU” over to the finance company instead of waiting until they’ve collected it from your client. This option is best if there may be some time lag between when customers make payment and when they receive it back in full.
For ACH or EFT, transactions are typically sent electronically to the finance company daily. This is best for businesses who want their money as soon as possible.
Factoring can be an excellent option if your customers take up to 12 months or more before making a payment. But ACH/EFT works well for those looking for quick access to capital and a faster turnaround time in general.
1: With Invoice Financing, You Get Your Money Fast
If you’re the type of business owner that struggles to make payroll on time because you can’t get a loan, this is good news! With invoice financing, your customer pays upfront. They agree to let the financing company take over responsibility for paying off their debt.
This means that when it comes time for them to reimburse what they owe, they’ll be sending one monthly payment. This is instead of smaller ones. Thus, making everything much easier from a cash flow perspective.
More importantly, though, with no penalties attached to late payments or missed deadlines, there’s less chance of hurting your credit rating as well.
2: There Is No Additional Debt Added
As mentioned, one of the best things about invoice financing is that there are no penalties for late or missed deadlines. This means you have complete control over how much and when you pay without adding additional debt to what’s already owed!
When it comes time to make your monthly installment payments on invoices, they’ll be calculated based on the amount of money left outstanding (instead of interest rates adding onto a balance).
So this means if you’re sending in $200 per month but only owe $150? You can keep doing so without fear. That way, even though it might take more than 12 months to repay what’s owed, at least your credit rating won’t suffer while waiting.
This also makes getting invoice financing a great option for those who want to invest in their business. You can put the money towards your marketing campaign or inventory investment and still have enough left over each month to make payments on what’s owed-without having any penalties added onto what you owe!
3: It Is Cost-Effective
When you look at what’s involved in an invoice financing agreement, it might seem like there are high fees, but that really depends on how much is owed. For example, if someone has $50K outstanding and pays back 15% each month? That comes out to around $667 per month, which equals about 14 months.
That means the total amount paid for this particular invoices finance would be close to $8000–which doesn’t sound too bad when considering they’re paying back less than 50% of their original debt. It also helps them avoid penalties or interest rates that one may have added onto other loans offered by banks or other institutions with different terms.
In addition to being cost-effective, invoice financing can help to automate your process. That way, instead of having to spend hours on the phone or filling out paperwork for each loan application (or even worse–going through a bank’s tedious process!) You can save time by applying with us and have an answer in as little as 24-hours!
In other words: you don’t need to worry about whether you’ll be approved or not because our team will review every request individually and get back to you quickly, so it is easier than ever before when it comes to getting invoice financing.
4: Dynamic Continuous Cash Access
One of the best things about invoice financing is that it’s a continuous cash flow. This means that you can access money quickly as soon as your customer pays and then get back to business instead of using those funds for something else!
This also helps make sure everything runs smoothly from month to year because no matter when they pay, there will always be enough left over each month to make payments on what’s owed without any penalties being added onto their current debt. Plus, with our easy application process taking only 24 hours or less (and an approval rate around 95%), It just got so much easier than ever before.
It doesn’t matter if you need $1000 to cover next month’s salaries (or even more!) Invoice financing can help-so apply now to see how much you can get approved for.
The best part is that our team will review every request individually and get back to you quickly, so it’s easier than ever before when it comes to getting invoice financing.
5: It Scales With Your Business
Another thing to love about invoice financing? It’s scalable with your business! If you ever need more money, it’s easy as pie to get approved for a higher amount.
Invoice financing can help businesses who are in the following situations:
- When they have unpaid invoices that customers won’t pay because of bankruptcy or insolvency
- If they’re looking at future orders but need funds now before production begins on those items (without having any penalties added)
This freedom ensures that your business will have the money it needs to run smoothly and successfully without any worries.
6: Peace of Mind
We know that this is a big decision, but one of the best things about invoice financing is that it comes with peace of mind.
You can be confident in your business’s financials because you’ll always have funds available. You will never need to worry about going out of business or having any penalties added onto what you owe! That means there isn’t any pressure on your end, which also helps bring a sense of relief knowing everything has been taken care of for now.
In other words: the financing team will review every request individually and get back to you quickly, so it’s easier than ever before when it comes to getting approved for an invoice finance loan. They are confident that once you take advantage, you won’t, and can’t, look back.
Any business that is fast-paced and dynamic requires clarity and peace of mind. This is not easily achieved. However, with invoice financing, this is achievable for your business.
7: Improved Revenue
Invoice financing can help improve revenue, so you’ll have more capital to work with when it comes down to paying for things that need funding.
It also means that your business will be able to focus on other aspects, like production and marketing, which leads to a bigger customer base!
This is all thanks to the peace of mind we offer because once you get approved, our team takes care of everything else: from applying for funds and getting them set up at the bank (within 24 hours!).
To make sure they’re paid back according to if an agreed-upon timeframe as well as collecting overdue payments automatically. That way, there are no worries for you anymore while leaving room for improvement–all without any penalties added onto what was owed originally.
Increased revenue is great for any business, and invoice financing is the perfect way to do it!
Financing Done Right
Invoice financing can help improve your revenue, save you money on penalties and interest rates, and offers peace of mind. If you’re interested in getting started with it for your business today- then apply now!
It’s never been easier or more affordable to take advantage of invoice financing when managing finances.
The process is simple and easy, so don’t delay any longer. Just get approved for the amount that works best for your company by applying online now!
We know this is a big decision. But rest assured, because our team will be happy to walk you through every step while reviewing each request individually for fast approval.
With no worries about ever going out of business or having excessive fees added onto what was owed originally? It doesn’t get any better than that!
So apply today, and take advantage of this one-of-a-kind opportunity. It’s never been easier or more affordable to manage your finances with invoice financing.