invoice finance

Late Payments Causing Small Businesses To Miss Out On £250bn In Liquid Cashflow

Late Payments Causing Small Businesses To Miss Out On £250bn In Liquid Cashflow

UK small businesses are missing out on £250bn worth of liquid cashflow due to late payments, according to a new report by Siemens Financial Services. It’s revealed that an average small to medium-sized enterprise spends 130 hours a year chasing outstanding invoices and overdue payments, equating to a cost of £10.8bn per year. When this figure is combined with the average value of unpaid invoices, it equates to £250bn. Small firms appear to suffer from this ‘late payment epidemic’ disproportionately more than larger enterprises, and its suggested that this is because they tend to be positioned towards the end of the supply chain. Invoice Finance and Your Small Business Indeed, firms with an annual turnover of under £1m wait on average 72 days for invoices to be paid, compared to just 53-54 ... »

Asset-Based Funding to UK Businesses Hits Record High

Asset-Based Funding to UK Businesses Hits Record High

Asset-based lending to small and medium businesses in the UK and Ireland hit a record £20bn – up 4% from last year’s £19.3bn – according to a report by the Asset Based Finance Association (ABFA). While the number of firms raising finance against assets such as inventory, property, and intellectual property has grown, invoice finance remains the most popular option; accounting for 80% of the total amount of asset-based investment secured. According to the ASFA’s report, this growth in asset-based finance comes from the increase in the number of firms borrowing against unpaid invoices, which frees up cashflow and involves less ongoing restrictions than lending against ‘traditional’ products. Overall, asset-based and invoice finance has experienced a year-on-year increase of approximately 4% ... »

Small Businesses Getting Paid 3 Weeks Later Than Larger Counterparts

Average wait time for small businesses to receive payment rises from 64 days in 2006 to 71 days in 2014 Companies with turnovers of less than £1m wait an average of 71 days to receive payment from customers, whereas businesses with a turnover of over £500m only wait 48 days. Research by the Asset Based Finance Association (ABFA) revealed that although the government has put pressure on larger companies to sign on to the Prompt Payment Code, a voluntary register of companies committed to paying invoices in accordance with contracts; the number of days that small and mid-sized businesses wait to get paid has increased since the recession – rising from 64 days in 2006. The ABFA believe that the increase in payment times is a result of larger businesses using their power over their small busin... »

Half of Small Business Owners Unsatisfied with Current Banking

Forum of Private Business survey reveals a quarter of businesses still unwilling to switch to alternative funding Figures released today by business support group The Forum of Private Business (fpb) revealed that just under 50% of small businesses surveyed were unsatisfied with their current bank funding options. Participants cited bank charges, reductions or calling in of loans, and complications in receiving finance as their main causes of concern regarding their business’ future. The Forum’s results showed that many of the small businesses felt that for the sustained growth of the UK’s small and mid-sized businesses to continue, banks would have to make changes to their funding system – with many calling for more flexibility, greater access and for risk to be more dispersed. Additionall... »

Invoice Finance and Your Small Business

Invoice Finance and Your Small Business

As a small or medium enterprise, you’re no doubt aware of the issues faced when trying to secure funding. Securing credit from traditional lenders such as banks is becoming increasing difficult, with many businesses receiving nothing in the way of financial support. And for those who do secure some form of funding, in most instances it isn’t enough. This has led to the creation of many asset-based forms of funding, such as invoice finance. Invoice finance explained In the main, invoice finance solutions come in the form of factoring and invoice discounting, with both involving the same principle of funds being provided in accordance with the invoices issued. How Does Invoice Finance Work? As soon as you issue an invoice, the invoice finance provider will immediately release an agreed perce... »

Invoice Finance: A Growing Form of Finance

In the past, businesses seeking finance were fond of queuing up at retail banks to seek funds. This trend is alienating with the growth of innovative forms of finance such as invoice finance. It occupies the middle spot between the traditional lending mechanisms and more exotic forms of raising income. Invoice Finance is the term used to describe funding solutions that enable your business to release money tied up in your sales ledger and outstanding invoices. Simply put, a range of solutions allocating the value of funds against the value of unpaid invoices. Invoice Finance turns into Cash. Emergency liquidity makes invoice finance stand out from other forms of finance-ways to be paid most of what you are owed almost immediately. This eliminates the lingering payment period that you have ... »

Invoice finance – Things to Watch out for

Invoice financing is a service that allows businesses to sell invoices to a third party company who process the invoices giving businesses the opportunity to draw loans against the money owed. This form of financing is generally used to improve cash flow but is also a more secure way in which to reduce administrative overheads. However, as with all financial tools there are potential pitfalls that need to be factored in to your decision making. Advance Limits When considering invoice financing you should be aware that lenders set limits on the money they advance. This generally ranges anywhere between 50-95%. The advance rate is largely affected by the credit rating of the businesses customers. If the credit rating is poor then the advancement would be lower as the risk is greater. Some th... »