Should your company require more working capital at a swifter rate this quarter, an invoice finance facility could be the perfect solution to its problems. Find out the numerous possibilities which this business service funding mechanism can open up for your cashflow.
Generate more working capital for your daily operations
For many businesses, the UK’s economic climate has rarely presented them with greater obstacles to obtaining working capital than in 2017. The more uncertainty that the government and EU’s ongoing Brexit negotiations evoke, the greater the ramifications become for domestic firms, with the pound’s ongoing freefall, upcoming changes to business rates indexation and murmurs of interest rate increases by the Bank of England all threatening to detract from companies’ bottom lines, and thus from the amount of money available to pay their staff wages and suppliers or better yet grow their operations.
Pursuing an invoice finance package can have significant benefits for UK businesses in this regard, opening access to a pre-arranged percentage of their invoices’ value almost instantly and in doing so obtain the capital needed to complete these crucial business activities without delay. Recent UK Finance data shows that the Asset Based Finance Association’s affiliated companies – many of whom form part of Touch Financial’s panel of over 30 prestigious invoice finance lenders – provided clients with nearly £22bn in funding during Q2 2017, a 13% rise on the same quarter last year. This only serves to demonstrate how monumentally these facilities can increase your business service funding, particularly during a period when external factors like exchange rate shifts can otherwise so easily constrain your enterprise’s potential.
Take advantage of booming demand for UK exports
Another key area where UK business service funding will doubtless become a greater priority going forward is that of international exports. As we reported last month, an inevitable counter-effect of the rapid decline of GBP has been a notable rise in demand from EU-based and other nations looking to purchase British goods at cheaper exchange rates, to the point where domestic manufacturing output and orders reached record heights this summer. Quite how long we can expect this surging appetite for UK exports to last remains to be seen as Brexit negotiations develop and as trading bodies ideally regains some long-needed certainty, but for now SMEs and larger businesses have an almost unparalleled opportunity to take advantage of this growing financial faze.
In the event that your business has previously considered diving into the exports market, then again, an invoice finance package can help provide the business service funding often required by fledgling – or even booming – firms to take the plunge. Factoring or invoice discounting facilities are already helping countless businesses overcome the longer payment terms often involved with selling abroad, the restrictive trade tax percentages imposed locally outside of the UK and any unexpected exchange rate fluctuations they encounter along the way. Once you’ve finished reading this article, be sure to visit our import / export finance page today to discover all the details about how our expert consultants can point you in the right direction towards international success.
Escape the UK’s bad debt crisis unscathed
No matter whether or not they’ve considered or pursued an invoice finance facility already, bad debt remains a dangerous threat to the vast majority of UK businesses today. Case in point – domestic SMEs reported in July incurring 70% greater levels of bad debt this year than in the summer of 2016, with the total unrecoverable debts among the 1000 firms surveyed standing at over £20,000 that month. That Federation of Small Businesses chairman Mike Cherry described a “culture of late payments” pervading the UK SME sector at the time therefore hardly seemed surprising, with the concerning sense that this represents a rising trend as opposed to one on the brink of subsiding only likely to cause further unease for up-and-coming British firms moving towards 2018.
Nevertheless, options are available for those businesses concerned that their in-house credit collection facilities will struggle to motivate their debtors into handing over their owed funds beyond the usual 30-60 day payment window. While some invoice factoring and discounting providers will leave the credit collection duties up to their clients, who must then repay any monies advanced but overdue from customers after a certain window of time, others lenders offer non-recourse facilities, whereby they’ll provide credit protection up until a pre-agreed monetary limit. Simply get in touch with our team today and our consultants will help you find the lender best suited to your firm’s specific requirements and objectives, bad debt-orientated or otherwise.
How to find out more
As well as the information provided on our various dedicated invoice finance product pages, you’ll find a wealth of further guidance surrounding the different facilities available, their benefits and their associated fees in Touch Financial’s regular blog content. From our guide answering the most common invoice finance questions to a look ahead at the challenges facing SMEs in Q4, from the emerging late payments crisis to confidence-boosting projects like the electric Mini, our independent coverage of these products and contemporary financial issues will allow you to reach an informed decision about whether invoice finance is right for your business.
Above all, though, if you have any queries about how invoice finance can help provide the business service funding your company may sorely crave in Q4 and beyond, contact our team of consultants today here.