What Are Invoice Finance Brokers, and Why Should Businesses Use Them?

Posted 10 months ago by Pete

Those businesses which invoice their clients for payments will be well acquainted with the lengthy waiting times which are included in the process. Typically, an invoice will take between 30-120 days to be paid in full, meaning that businesses often struggle to finance future operations until the money comes in. Invoice finance provides an effective solution to this problem, so here are some of the benefits of using an invoice finance broker.

How Does Invoice Finance Work?

There are a number of different invoice finance options which can be used. The main ones are invoice discounting and invoice factoring, both of which involve a lender forwarding you the majority of the value of your invoice in one payment. Once the customer has paid in full, the lender then forwards you the rest of the money you are owed, with their advertised fee having been taken off the total amount lent. This cuts out the invoice payment waiting time completely, and allows businesses to carry on funding operations.

What is an Invoice Finance Broker?

An invoice finance broker is a company, such as Touch Financial, which can find the best invoice finance providers for your business. Not only does this save you the time looking around for the best deal, it also helps you compare the different lenders from a single platform. Using an invoice finance can benefit businesses in a number of ways, not least because they contain useful information on the different funding options available to them from a variety of different lenders.

Cash Flow

Once you have found an effective invoice finance provider through a broker, you can use them as much as you like in order to keep cash flowing into your business. Keeping cash flow healthy is incredibly important, as stunted cash flow can seriously, sometimes fatally, harm a business’s ability to operate effectively. Through receiving money for invoices immediately, businesses can reinvest their profits and take on more clients at a faster rate. This can further improve cash flow, eventually removing the need to use invoice finance altogether.

Faster Growth

One of the main overarching advantages of invoice finance is that it leads to accelerated growth for many businesses. This means they can plan ahead for expansion, as they do not have to worry about having the necessary funds to help them grow. Since invoice finance brokers help businesses to secure the funding they need from lenders, they can have a significant impact on the business’s future prospects. They help them to avoid paying any unnecessary fees and ultimately gain a better understanding of the invoice finance process as a whole. So, invoice finance brokers can play an important role in helping you to reach the next stage in your business development, and provide a consistent, well-funded service. Through finding you the most effective invoice finance options at the best prices, they enable you to take home more profits and effectively plan ahead for the future.