There are many businesses in today’s economy that thrive off-invoice discounting.
What does invoice discounting mean?
The term “invoice discounting” refers to an invoice finance mechanism that allows a company to receive a loan that is leveraged against unpaid invoices.
How it works is that while you are waiting for your client’s invoices to be processed and money to be received, the invoice discount lender will provide you with capital to ensure a consistent and healthy cash flow.
This finance arrangement between you and the invoice discount lender can be kept confidential, as it is no business for your client to know.
A simple way to keep money in the bank and cover costs while waiting to receive payment, often taking more time than expected.
If you are a company with these characteristics, you should consider partnering with an invoice discount lending company.
- Sell on a 30-90 credit term
- Have a large staff
- You are in the business of slow payments because your invoices are large amounts
- Risk of being short of cash throughout the year due to late payments from clients.
The top businesses that can benefit from invoice discounting are as follows:
- Recruitment companies. Are you a recruitment company with a large staff that often receives late payments and experiences a seasonal cash flow shortage? Invoice discounting will assist you with releasing funds to keep afloat.
- Fintech companies – Are you a fintech company that sells products that takes time to translate into cold hard cash due to complex paperwork and invoices in the high value? Discount invoicing can help you during turbulent times.
- Commission sales companies. Are you a sales company that works for commission and have to wait 30 or 60 days to receive your payments? Consider invoice discounting as a healthy business fund lending to keep a consistent cash flow.
- Clothing companies. Are you a clothing company that sells to retailers that generally take 30 – 90 days to pay their invoices? SME funding products such as invoice discounting can help you cover expenses. At the same time, you wait to receive your money.
- Storage companies usually sell on credit, and their clients typically take longer than usual to pay for their storage costs. The storage company needs cash flow to keep its head above water while processing payments. If this sounds like you, give Funding Bay a call to learn more about discount invoicing.
More Businesses that benefit from Invoice Discounting:
- Printing companies. Printing companies that supply in bulk and have to wait for their invoice payments to be processed require invoice discounting to release working capital to keep the business going.
- Construction companies work on massive projects that generate millions in revenue and have a high expense. When the value of the sale of the project is very high, complex paperwork legalities, and bank transfers all take time – the construction company should look at invoice financing as a plausible option.
- Farmers – Farmers usually supply to wholesalers and retailers notorious for taking too long to pay as they usually buy on a 30 to 90-day credit roll-out. While farmers wait, they can rely on invoice discounting to see them through the tricky times without stressing about the loan payback associated with accredited clients.
- Steel businesses have many industries and many clients. Orders are usually large and are bought on credit. In the interim, steel businesses can use invoice discounting as a method of business lending to cover their expenses. At the same time, they wait for the money to be received from unpaid invoices.
- Security companies. Security companies have high-valued contracts but slow-paying clients. Discount invoicing is a way for security companies to secure funds to keep afloat while making transfers.
- Accounting practices. Accounting firms, like many other industries, are paid late. This creates a problem as accounting practices have high expenses that need to be covered. Discount invoicing is a business lending tool that can help the firm reflect healthy bank statements by accessing cash flow.
Does this article resonate with you?
If you are not on this list, however, this article resonates with your issues, then don’t hesitate to get in touch with Funding Bay for more information on how we can assist you with finding the right lender to soothe any cash flow problems.
Unlock the true potential of invoice discounting and take your business to new levels of stardom and success.
Financial management is all about balancing your income and expenses and having a healthy cash flow in the interim is the secret to great success.
Let the Funding Bay consult you and match you up with the perfect invoice discount lending company. We partner with only the most credible invoice discount lenders so that you do not have to ever learn the hard way.
Be sure to check out Funding Bays’ other services.
