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Invoice Finance

Over the years invoice financing has grown in popularity. Once upon a time it was deemed the finance product of last resort however nowadays it is one of the first facilities that professional and business advisors recommended to their clients. The main reason why businesses go bust is that they run out of cash. A bank overdraft may not give the appropriate amount of cashflow to operate a business at the correct level.

More and more businesses are turning to invoice finance as a means to boost their financial flexibilty and use either factoring or invoice discounting to generate much needed cashflow.

Despite the goverment in their attemts to boost liquidity in the banking market traditional forms of bank based funding remains tight and difficult to obtain. Even the much publicised governement backed EFG funding scheme is having little affect. The good news is that many business owners are discovering that many alternative credible forms of finance are available other than the banks loans and overdrafts.

Mainly due to a lack of understanding of invoice financing these alternative forms of finance have been off the radar for many businsses. There is sometimes a perception in the market that factoring or invoice discounting can be costly and out of reach for many businesses. Factoring can be obtained for a business with turnover as low as £100,000. Costs to run a full factoring facility start from a few hundred pounds per month. There are two parts to the charges. First there is the cost for borrowing the money which is comparable to a bank overdraft. The second element of the charge is the cost for operating the facility which may include provision of credit checks on your customers, credit control and chasing late and overdue payemnts. Compare this with the cost of employing a full time credit controller or the time and cost of the owner manager chasing the debts themselves this can constitute pretty good vale for money.

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XL Business Finance Ltd is a privately owned and independent business financing company with established links to many of the UK's leading finance houses. XL Business Finance provides a viable alternative to high street banks that lack the flexibility and imagination to provide a solution to most business users requirements. XL Business Finance can provide a full range of business financing solutions and we ensure a high level of customer service and pride ourselves on quick decisions. Our independent status will ensure any offer of funding and asset finance leasing is best suited to our customer’s needs.

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