It is one of those things that every business owner is well aware of, just how important it is to have cash flow within any enterprise. To pay the bills, meet expenses, and invest in growth, there has to be a constant inflow of payment. That is why you need an Invoice Finance Company UK—a valuable ally when it comes to business development and financial stability. 

Let’s explore the various advantages of dealing with a UK-based invoice finance company.

Starting from earlier payments and ending with the decrease of the debt level and increase in the company’s financial freedom, let go through the benefits of working with an experienced invoice finance company UK.

What is Invoice Finance? 

First off however, let’s understand exactly what  invoice finance is, and the benefits of invoice finance for your business. Invoice finance is a financial solution that is also known as factoring or invoice discounting, where businesses can raise funds against unpaid invoices. When you sell your invoices to a third-party agency, you are then able to retrieve the cash trapped in accounts receivable and reinvest it in other parts of your company, prior to those invoices being paid by your customer.

Benefits of Working with an Invoice Finance Company in the UK

Now that we’ve covered the basics, let’s look at the advantages of working with an invoice finance company UK:

Accelerated Cash Flow 

There are several benefits of employing an invoice finance company, the main one that is often provided by an invoice finance company, which is improved cash flow velocity. When entering into an invoice factoring services agreement, the third-party provider gives you immediate access to the cash that is tied up in the account receivables within 24-48 hours. This helps you discharge your bills and those stresses and dedicate your time and energy towards the growth of your business. Your business is no longer beholden on payments being made by customers, and whilst they generally mean well, if you have ever experienced an ‘illness’ by the person that pays the bills, then you will understand the value in prompt payments.

Reduced Debt 

Invoice finance assists in minimising debt because it provides the company with much-needed cash to clear their own invoices. This frees up working capital, thus limiting the use of overdrafts and other costly debt instruments that may be in place. 

Increased Financial Flexibility 

Having an invoice finance company UK means you will have increased your business credit capacity significantly. It should be noted that the funds raised from the sale of invoices can be used for any purpose that is necessary for the development or expansion of the business, the taking on of additional business, or used for stock acquisition.  

Improved Credit Control 

When you outsource credit control to an invoice finance company, you do not have to worry about spending time and resources going after your clients for payment. The provider will do so on your behalf so that you will be paid on time without being delayed by client-side procedural issues or cashflow challenges. 

Access to Expert Advice 

There are many well-established invoice finance companies in the UK and many of these are very experienced in helping you better manage your accounts receivable. It is this guidance that can assist you in improving your flow of finances as well as in making proper decisions for the functioning of your company. At Pegasus we work with a range of UK finance companies, and have established strong relationships with them – this ensures that we can source and provide solutions that will be best-fit and work seamlessly with your own business functions.

Scalability and Growth 

As your business grows, for many firms it also means that their reliance on clients to pay on time also grows – your own invoices become larger with your suppliers and staff, and it’s not uncommon for these larger invoices to become the cashflow bottle-neck or breaking-point for businesses looking to scale . Engaging the services of an invoice finance company based in the UK is a good way to increase the range and extent of your operations since you will receive a cash advance from the company anytime you need it.

Protection against Bad Debts 

One of the benefits of engaging an invoice finance company is the amount of coverage it offers against bad debts. In this case, if a customer does not pay their invoice, the provider will assume this risk and follow up for payment for your business. 

No Asset-Based Financing 

As opposed to conventional types of financing that rely on tangible assets, for example, asset-based lending or equipment leasing, invoice finance allows you not to provide particular tangible assets to secure the financing. 

Tax Benefits 

At times, invoice finance can be utilised in a manner that is tax-efficient for the management of cash flows.When sales are credited to a third party, you may be in a position to optimise your taxes, thus enhancing your cash flow. 

Conclusion 

Working with an invoice finance company UK can be incredibly beneficial for companies experiencing cash flow problems or those that want to expand their enterprise. With better access to much-needed funds, lower levels of debt, and increased financial freedom, an invoice finance company can enable you to reach your business objectives a lot faster. 

Finding the most appropriate invoice financing company for your specific needs can be a challenge in itself – that’s why Pegasus have done the hard work for you in building those connections to the right funding firms already. Contact the team here at Pegasus Funding to bring you a step closer to tapping into the strength of an improved cash flow, and build more certainty into your business’s financial operations.