Obtaining cashflow finance that is suitable to your needs can be a hard battle. Business cashflow needs to be steady and predictable.
In this article, we offer 3 solid tips on how to successfully obtain cash flow finance. While we refer in this article to cashflow finance, it is understood that this term is also commonly known as debtor finance, invoice factoring or invoice finance.
Tip 1 – Business to Business sales
Most B2B businesses are suitable for a debtor finance loan, essentially as long as you have business-business sales on credit terms. It is imperative that invoices to your customers must be for goods and services where delivery is complete and you have met your obligations.
It may not be necessary for you to have to put your whole finance ledger through the invoice finance provider but want to only finance a few invoices or customers. Conversely, you may want to contribute the entire ledger in order to access more funds.
Tip 2 – Credit control
Another important consideration is of course credit control. Many cashflow finance providers will insist on managing credit control themselves. This may not be in your interest depending on your CRM requirements and salesforce methodology.
However, you may need to be open to this in order to secure the best possible terms.
It is also important to investigate the different types of debtor facilities that may suit your particular business.
Cashflow finance is secured mainly by your debtors’ ledger (accounts receivable) and as such does generally require property security. Obviously, this is a major point of difference when comparing other types of finance such as lines of credit and bank overdrafts.
Tip 3 – Find a reliable partner
It goes without saying that a reliable partner with a successful track record in the industry is imperative.
Especially when it comes to professionally collecting payments from your customers, issuing reminder letters and following up on late or non-payments with reputable collection and legal teams.
A partner that helps small businesses with a variety of easy finance options and providing your business with the funds it needs within 24hrs of your approved application is also important. Online products especially can be quite helpful in this regard with easy repayment options, and professional account management.
You want to find a partner that won’t slow you down with additional red tape or unnecessary lengthy delays. With the right provider, this can be done efficiently by obtaining an accurate picture of your business financials very quickly and offering products which can either loan the value of invoices you have currently owing to you, or by discovering new innovative options which give you more flexibility to expand and consolidate your growth opportunities.
With these important tips, you should have a much easier path to securing the right cashflow finance for your business.