When it comes to financing invoices, there are a number of options available. Most companies will choose between overdrafts and invoice finance. These two types of financing can be very different, but they also have some similarities that you should be aware of before you make your choice.
The main difference between overdrafts and invoice financing is that one is a stable source of funding, while the other isn't.
Overdrafts are a very unstable type of borrowing: if you don't repay them in time, they will turn into fines, which can ultimately lead to your bank closing your account.
Invoice finance is a more reliable option because it allows you to access capital on an ongoing basis without having to worry about paying back large amounts at once or facing penalties for late payments.
In short, invoice financing gives businesses more control over their cash flow by providing an easy way to get funding from customers who pay later than expected while avoiding the risk of defaulting on an expensive overdraft loan.
Invoice finance solutions is available to businesses of all sizes, in all industries and at any stage of growth. Whether you're a start-up or established company, invoice finance is an option for you.
You don't need a credit history or even a business track record to qualify for invoice financing. If you're running your own business as a sole trader, simply applying via our online application provides instant approval with no paperwork required.
You can choose the amount you need. You can borrow for a short period of time, so you don't have to worry about interest rates and their impact on your cashflow.
If you're in a position where you're unable to pay vendors, this is an ideal alternative because it's based on what funds are available rather than a pre-agreed rate of interest.
You can use invoice finance if:
- You have invoices that are due but haven't yet been paid - You need short-term funding to get your cashflow back on track
Invoice finance is fast and flexible. It can be used for any business, not just small enterprises. You don't need to have collateral or security—no credit checks either. And you don't have to wait weeks before funds are available; the money can be in your account within hours of an invoice being approved by our panel of lenders (if you're approved).
So, let’s sum up. Overdrafts are great to help you get through a cash-flow crunch but there are alternatives if you need more flexibility and speed.
Invoice finance is a great option for turning invoices into working capital if you have a business that needs funding upfront for stock or equipment.