How can I improve my businesses cash flow?

Whether your business is shooting for the stars or just starting out, one thing is for sure, cash flow can always be improved. Increased cash flow can be the answer to expanding your business or ensuring that your business is financially stable. There are many offers out there for improving your cash flow, but which one is the best for you?

Releasing cash tied up in invoices

An unpaid invoice can cause a company financial difficulties. Cash keeps businesses moving forward so when you hit an issue like an unpaid invoice it can have disastrous effects on your company’s growth and development. In this situation there are solutions available that will release the cash in your unpaid invoices.

Invoice Finance – Factoring

Factoring allows businesses to receive cash upon raising invoice normally for around 85% of the invoice value. The great thing about Factoring is that the funds are available usually within 24 hours, so there is no long waiting period and your business can move ahead almost instantly.

How factoring works

  • ABC Limited raise an invoice
  • A notice will placed on the invoice instructing the debtor to pay directly to the lender (A ”notice of assignment”)
  • When a copy of the invoice has been passed to the lender, the lender will release funds to the company
  • The lender will be responsible for collecting the outstanding payment.
  • You have received payment hassle free

Am I eligible?

To be suitable for this solution you must be in the business to business market, with a minimum turnover of around £25,000 plus VAT, even the smallest of businesses will be considered.

For more Information on this service visit or alternatively call 0845 388 9725

Invoice Discounting

Similar to factoring Invoice discounting also releases funds from tied up invoice however the process is slightly different. With Invoice discounting the major differences is that your customers have no idea you are using the service it is completely confidential, in addition it is still your responsibility to collect the debt.

How does Invoice Discounting work?

  • ABC Limited uploads invoices to lender
  • ABC retains control of sales ledger (collecting payments)
  • Cash is released by lender within 24 hours of confirmation
  • The balance is paid to the company when the debt is settled
  • The debtor is never aware of the lenders involvement at anytime.

Am I eligible?

In order to be eligible for this service you must be in the business to business market and generally speaking your turnover should be no less than £300,000. Also you must have the capability to chase up debts and have strong in house management skills and procedures.For more information on this service visit or alternatively call on 0845 388 9725.Each of these solutions offer businesses the opportunity to expand and grow. For a more hassle free approach Factoring is clearly the one for you and is generally favoured by smaller businesses. On the other hand larger businesses tend to favour invoice discounting due to its discretionary nature. Each has their own unique advantages for more information on this, click the link. Invoice Factoring vs Invoice Discounting.

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