Being in business is hard enough without having to worry about if you’re going to get paid for a product or service that you have provided. I suppose a lot of business people with hindsight may have had second thoughts about setting up their own business in the first place. However, you will always come up against customers who can’t or won’t pay their outstanding invoices and so you need to look for alternative ways within the law to get paid. Small businesses suffer especially from this kind of non-payment and it can actually put a small business out of business if they don’t get paid on time. Larger companies seem to manage a little bit better because they have a wider customer base and there is a lot more cash coming in than there is going out.
Thankfully there are lending institutions out there that offer a service where you can get a prompt business loan by submitting cleared invoices as the collateral. The loan itself ends on the due date of the invoices that were put forward as a type of guarantee. It is called invoice discounting and there are a number of reputable lenders who will gladly give you 100% invoice finance. This method of getting paid has become incredibly popular and if it is something that you are considering right now, then here are some of the advantages of using such a service.
– You can get fast cash – This can be incredibly important for businesses if they want to take advantage of a deal that only comes up once in a blue moon. Sometimes wholesalers and other retailers want to offload stock at a drastically reduced price would you need quick cash to be able to take advantage of the situation so that you can create a healthy profit margin. This is when invoice discounting becomes incredibly useful because you can get liquid cash as soon as the invoice is issued and this will help you to get hold of this cheaper stock, increase your profits and add to your customer base.
– A quick decision – If you are a business owner then you will know and understand the difficulties of trying to get money from normal lending institutions like banks and building societies. The application takes forever and they want you to submit reams of paperwork and you might not even be guaranteed a positive response at the end of it all. That’s the beauty about invoice discounting because there is a short turnaround time from when you submit for invoice financing and when you receive your money.
– Your assets are protected – Once again, if you go for a standard business loan the bank or lending institution will expect you to put up some kind of collateral to back up the long application. In this case your business and its assets may be at risk but with an invoice discounting loan, there is no such requirement.
Invoice discounting is an excellent way to be able to get hold of cash that is locked away in customer invoices and you might not get paid for at least another 30 to 60 days. It provides a lifeline for many businesses and especially the smaller ones.