Thank you to Jonathan Willder, CEO of Catalyst Business Finance for sharing this ‘need to know’ guide to selective invoice finance.
Cash is king for all businesses
Keeping cash flowing can be a challenge for even the largest of businesses. One of the biggest reasons for stifled cash flow is due to valuable cash tied up in unpaid invoices, which can hinder business growth and could ultimately cause insolvency if not resolved.
Invoice Finance can ease cashflow
Invoice Finance – the process of releasing cash tied up in all unpaid invoices – is a stalwart of the alternative finance market. For many years business owners have been able to release up to 90% of the value of unpaid invoices to relieve the strain on cashflow and focus on business growth.
Selective Invoice Finance is more flexible than ‘whole turnover’ financing
Selective Invoice Finance is a way of accelerating cashflow whilst remaining in control of your finances at all times. ‘Selective’ as opposed to traditional ‘whole turnover’ invoice financing, means the business owner picks which invoices to use and more importantly when the service is required. It’s simple to use, flexible and transparent.
Selective Invoice Finance is a great option if you’re looking for flexibility with your finances. It’s a more straightforward funding option as the business is not tied to a long term contract and you can dip in and out of the facility as and when needed. As a Business owner you have direct control over costs and some providers also offer the opportunity to repay early if additional funds become available from elsewhere.
Selective Invoice Finance is really straightforward.
Top 10 things to consider when using selective invoice finance
+ Quickly unlocks cash owed to the business, no extra funding needed or loss in equity
+ A personal service with no long term contract
+ Agreed facility provides peace of mind of ongoing cash availability
+ Business owner controls the cost and canaccess the cash and repay the balance at anytime
– Application process can be thorough
– Lender likely to require access to financial information
– Invoice debtors need to have a good credit rating
– Most providers only charge a pre-agreed percentage of the money advanced, this is calculated daily.
£ Some providers may make additional charges e.g arrangement or transactional fees.
£ Cost effective for short-term or occasional cash requirements. Arrangement or transactional fees may be applicable.
Jonathan Willder, CEO, Catalyst Business Finance, July 2016