Invoice financing — a mechanism for business growth
In the U.K today, the business landscape is evolving. SMEs strive to grow alongside these changes to keep up to date and excel in financial performance. Invoice financing is a great way to obtain instant cash that is tied up in your business’s outstanding invoices, which can later be used to capitalise on opportunities and additional business, ultimately enhancing growth and expansion.
Business success can often be identified with one vital component, cash flow. Companies from all across the globe, especially those operating in the U.K can take advantage of invoice financing companies to gear up their cash flow life cycle in the time period of working capital shortfalls. This alternative form of short term funding is also considered as an asset solution that supports the prosperity of a healthy and stable cash flow balance.
Generally, it is considered that invoices of slow paying customers are sold primarily to specialists such as invoice financing companies to obtain instant funding only in the stringent times. But for an SMEs that is anticipating a long-term growth plan, invoice financing is not only beneficial when you hit a financial downturn, but also to ensure expansion plans for the future are funded and carried out.
Rather than the traditional use of banks, overdrafts and outdated paper-based models, technology based invoice financing companies now allow business owners to upload their invoices onto an online platform, with up to 90% of approved invoices eligible to be financed within 24 hours. With access to cash, SMEs can take advantage of purchasing in bulk or initiating growth and expansion plans.
Invoice financing helps to acquire additional business and broaden growth plans
Frequently speaking, acquiring other businesses is an effective way to grow a business. If you can find competitors or businesses in other industries that would compliment your own, you could use them as platforms to scale fast. By looking more in depth within your industry and even outside of it, the prospect to find potential opportunities diversifies.
With adequate resources and cash in hand, SMEs can develop their growth plans by expanding business operations or introduce new product line categories.
With extensive cash at hand, entrepreneurs have the ability to free up time to focus on growth objectives. One angle to consider would be to analyse new opportunities in business by understanding your demographic better. Understanding everything from distribution channels to your direct competitors, and even an analysis of foreign markets and other potential industries. There are likely dozens of new opportunities you could pursue immediately with the proper amount of analysis.
Cash flow not only helps to alleviate those unavoidable financial obligations, but it also allows business owners to spend more valuable time in actually improving its existing operations and customer relations. This is a fundamental instrument that supports business growth. By understanding customers’ needs and developing products and services that meet those needs, SMEs can gain insight into their customers by personalising its services and encourage them to provide necessary feedback. At the same time, SMEs gain opportunities to attain more work and build their growing customer base.
Expected planned growth is the definitive way to reach your business goals. Planned growth can be simpler to manage than an unexpected rapid surge in business demand such as overflowing customer orders because it requires steady cash flow. Planned growth initiates many opportunities, such as extending your range of products or service, expanding facilities, or even acquiring or merging with another company. An invoice finance solution that grants you the capital to cover operating costs and free up time to focus on planned growth would be a constructive tool for your business.
Lou Chan, Populous World.
Populous World helps a wide range of industries and SMEs to fill cash flow gaps and secure funding for growth.
