What are the advantages of invoice financing?

Wednesday 12th January 2022

Invoice financing, while not a new idea, is rapidly gaining ground as one of the most popular finance solutions out there for businesses of all sizes, but particularly in the small to medium range. Companies appreciate the flexibility and the freedom it brings to the table, allowing them to relieve a little of the pressure that can come with unpaid invoices.

If the idea is a new one to you, one of your first questions might be what are the advantages of invoice financing? To answer that questions, and hopefully some others you might have, this blog will go through some of the key benefits that invoice financing has to offer.

The advantages of invoice financing:

  1. Better cash flow
  2. Quicker money
  3. Coincidental growth
  4. B2B business eligibility
  5. Credit control (optional)

1. Better cash flow

The most immediate advantage of invoice financing which many appreciate is that it offers a handy boost to your cash flow, allowing you to free up precious funds to pump into other projects or service improvements. A better cash flow almost always puts your company in a position where it can jump on new opportunities, and by taking of advantage of invoice financing, you can get the money in your pocket sooner without having to wait for your buyers to complete their end of the bargain.

2. Quicker money

Invoice financing is all about freeing up your cash flow quickly and a key benefit that businesses enjoy with invoice financing is that the money to cover your unpaid invoices will be in your account very soon after you agree the terms of your finance model. More often than not, the money will be available within 24-48 hours of an arrangement being signed off, letting you focus on the more pressing business at hand for you and your organisation.


Find out how much invoice finance would cost your business using our calculator

Invoice finance calculator


3. Coincidental growth

One of the main reasons invoice financing is so popular with SMEs (small to medium enterprises) is that the credit line of invoice financing grows along with your business. The idea is that your credit line runs concurrent with the size of the invoices it is financing, so as you make bigger deals and see larger amounts of money pass through your business, you’ll get access to more and more capital. It’s a handy solution for businesses experiencing growth who want to make sure that their finances are kept balanced on their way up.

4. B2B business eligibility

Due to the generally secure nature of invoice financing, it is very easy for most B2B business to qualify for the option from a variety of providers. This high level of eligibility means that as long as you don’t have any major financial issues within your business, you should have no problem working out an arrangement, especially if your clients have respectable credit ratings. Overall, the easier qualifying process makes invoice financing a better choice than other financial facilities.

5. Credit control (optional)

There are two different kinds of invoice financing, and businesses who go with the invoice factoring model will see their chosen provider actually follow up on the invoices on your business’ behalf. This can save you valuable time and lets you revert those resources that are dedicated to invoice chasing to focus on other aspects of the business that require their attention.

At its most basic level, invoice factoring lets you streamline your financial processes, and in many cases, like here at Novuna business cash flow, it’s strictly confidential so your customers are unaware of our involvement.

Want to learn more about how an invoice finance facility can boost your businesses cash flow? Get in touch

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