Cashbook Finance is a new Trade Finance company established in accordance to the FCA (Financial Conduct Authority) in the United Kingdom. By offering various innovative Cash Flow Solutions such as Invoice Finance (or Discounting), Factoring, and Timesheet Finance, our company mission is to support the growth of ambitious SMEs who are tired of waiting 30, 60, or 90+ days for payment of services they offer.
After a successful history over the past 10 years in the EU, our team of shareholders decided to expand into the UK market in response to the low levels of lending to SMEs. With our dynamic and expert team, the company not only provides classical invoice finance services, but also produces specially designed solutions by taking an innovative approach that satisfies client expectations in the best way possible.
Cashbook’s website contains an algorithm to calculate and estimate the cost of each cash advance. It also allows clients to securely upload selective invoices they need funding for through their online portal. Applications and funding requests can also be made online.
Invoice finance can be either a short or long-term funding option to release cash from your outstanding invoices. By assigning your receivables through Cashbook Finance, you can regulate your business’s cash flow, increase the working capital, and make your balance sheet more liquid, further growing your business into the next stage. With the right facility, invoice finance can be a cost-effective way of boosting growth and smoothing out seasonal trading, ensuring you can sell with confidence without worrying about the impact of large new contracts on your cashflow.
How does Invoice Finance work?
In the past, large banks would seek to cover a ‘book’ of invoices on behalf of a company. With the emerging of new funding providers, it is now possible to fund just a single invoice in order to borrow money against the amount that is due from your clients. This in turn helps cash-strapped clients respond to their business needs adequately, whether it is paying suppliers upfront, ensuring salaries are paid on time or funding the next growth campaign.
Poor cash flow not only stops a business from operating properly, but it also damages its reputation if employers are unable to pay their suppliers and staff.
Below is a snapshot of SME metrics and their cash flow challenges in 2019:
In this article we share with you the different advantages of invoice financing and how it can change the way you manage your cash flow!
1. Get Immediate Access To Cash Without Needing A Loan
While traditional loans are debt that usually has to be carried on the balance sheet and serviced with monthly interest charges, invoice financing works differently as it speeds up a business’s access to the money that it’s owed from its debtors. This type of finance does not require long term committed contracts.
2. Only Make Repayments When The Money Comes In
Invoice finance isn’t paid back until the original invoices are settled by your clients. There are no interest payments, in fact nothing needs to be repaid at all to the funder, as the funder only collects their money from your debtors when the debtors pays their invoices. Businesses who use these services don’t have to make fixed-term repayments. That’s great for cash flow!
3. Feel Better About Big Projects
Businesses carry a lot of cost for big jobs and payment is often slow when there’s a big corporate involved as the debtor. That’s a bad combo. Invoice financing allows businesses to take on larger and more lucrative contracts without getting stretched too thin as they are able to get immediate access to cash from the invoice they issue to the big corporate on completion of the job, instead of waiting the normal 30 to 60+ days for payment.
4. Business Growth
In order to grow, businesses need a steady cash flow. There are various reasons why factoring is good for business growth. To start with, it enables a business owner to focus on acquiring new customers rather than chasing debtors. Secondly, it allows a business to extend credit lines to its loyal customers who require credit facilities. Thirdly, it makes it possible for a business to pay its suppliers, and consequently avoid supply chain constraints. Fourthly, a business owner can focus on marketing his/her business rather than fending off creditors. These aspects can help you grow your business while competitors who are facing funding problems flounder.
5. Choose How Much Money You Need, And How Often
Businesses can choose how much cash they want to access when using invoice financing companies. They can stay in complete control and only access the funds that they require when they need them. Also, because invoice financing is typically paid back in a month or two (when the debtors pay), not a year/s later, companies can access the funds again and again, like a revolving line of credit.
6. You Can Apply For Invoice Finance In Hours
Business owners don’t need to leave their office, store or workshop to apply for invoice finance. They can connect to providers online, flag the unpaid invoices that they’d like to finance, and apply on the spot. There is minimal paperwork required (all online or via email) and money can be in the business account within 24 hours of receiving the information required. For those business owners that are not tech savvy, simple extraction of Excel or PDF files sent via email will also do the trick.
7. Reduce the Risk of Late Payments and Bad Debts
Late payments from customers and bad debts can cripple a business. Of course, you can take legal action against debtors who fail to pay their debts on time or are unwilling to pay, but this approach can be costly and lengthy because you have to hire and retain a lawyer to represent your company. To avoid such a scenario, invoice discounting helps to eliminate this risk. The invoice finance company does their credit check on your debtor independently, and often take out insurance against non-payment.
Invoice Factoring vs. Line of Credit (Normal Loans)
1. Invoice Finance doesn’t require taking on debt
Invoice finance does not expect that a company takes on additional debt. While it is often necessary for businesses to borrow money to get started and stay afloat, it is generally accepted that the less debt used, the better. Having debt makes it harder to get loans in the future and also puts a lot of pressure on companies to pay it back. Invoice Finance allows companies to receive needed monies without the hassle and risk of using a loan.
2. Companies receive money quickly
If a company needs money fast, there are few better options than invoice funding. In less than seven days, a company can obtain a large portion, up to 90% of their outstanding invoices. Companies with an established relationship with a factor, this time can be shortened to around 48 hours. This makes it a perfect option when a company finds themselves needing a quick infusion of cash.
3. Fewer hurdles
To receive a bank loan or a line of credit, it is necessary to provide some proofs that you are a good credit risk. A company will need to give all of its financial statements, have excellent credit and have been in business for a good amount of time — generally more than three years. In contrast, a company looking into invoice financing, will not have to provide this information. While a factor may want background information on the particular company they will be doing business with, the biggest concern will be the credit of the entity that owes on the invoice. This takes much pressure off the company in need of money.
4. Companies never have to pay back the money
Because the money given out is not a loan, there is no need to reimburse it. As a result, there are no payments, principal, and interest to be made. Companies pay back the factor after they collect the invoices.
5. Factors handle collection duties
Not only will a factor give a company a lump sum of money up-front, but they will also handle collection duties for those invoices. For businesses without a collection department, this provides a much needed and valuable service. Now obviously, this service is not free. The company will be required to pay the factor a pre-set fee after the invoices are collected.
Let’s try the visual way!
Essentially invoice financing allows a business to get paid immediately for the products provided and invoiced so that the cash can be put back in the business to purchase more inputs to sell more product quicker, hence increasing turnover and profits. Invoice financing provides immediate cash flow by releasing the cash tied up in sales invoices. Clients can get up to 90% on the face value of their invoices, within 24 hours of approval so there is no need to wait up to 90 days to get paid by your debtors.
So there you have it, Invoice Finance could just be your secret weapon to better business cash flow!
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+44 (0) 20 3239 0699
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