UKBA logo dark

Invoice finance for growth

By Richard Olsen

Invoice finance is a crucial resource for managing your cash flow.

Over three in five SMEs are affected by unpaid invoices, rising to nine in 10 for medium-sized enterprises. These late payments often restrict cash flow, making it harder to meet your company’s financial commitments and threatening daily operations.

Invoice finance seeks to unlock capital tied up in unpaid invoices, easing the financial burden on SMEs. It provides funding, up to 90% of the total amount of the invoices, that injects capital until the customer payment is received.

As well as managing cash flow, invoice finance is a tool for growth. Using it supports your expansion strategy. We explore how.

  • It enables positive cash flow

The primary purpose of invoice finance is to improve cash flow by preventing the negative implications of late customer payments. Positive cash flow across your company is crucial to long-term survival and growth.

By having sufficient cash flow, you can draw capital into the growth strategy, enabling you to cover the costs of increased resources and assets or other expenses required to expand.

  • It reduces time spent chasing payment

With late payment posing a problem to many businesses, much time is wasted chasing up invoices. It takes away valuable hours you could spend working on your business, including creating and pursuing growth ambitions.

A quarter of owners utilising invoice finance say it saves them time. If you want to do the same, remember to pursue an invoice factoring option, as this will see the lender chasing up payment on your behalf.

  • There are no restrictions on capital

When you raise capital through invoice finance, there are no restrictions on where it can be used.

During your pursuit of growth, there are several aspects that you may need to cover the expenditure, including:

  • New assets
  • Increased volume of supplies
  • Development of premises
  • Staff salaries
  • Rising overheads
  • Changes to processes and infrastructure
  • Staff training

The funding received could be used towards the costs listed above – or any others that may be required – so it works perfectly with your growth strategy.

  • It’s compatible with other funding types

Another benefit to invoice finance is that it may be used alongside other funding types, including other loans and equity funding.

This is unlike other types of funding that might be more restrictive.

External finance is often key to growth, so using invoice finance options alongside other forms will maximise your borrowing amount and enable you to reach your targets. It’ll also allow you to maintain cash flow while you simultaneously invest in your growth.

  • It reduces risk

A crucial part of growth is attracting new customers and generating higher demand.

However, bringing new customers to your business carries a risk. With late payment such a prominent issue, there is the danger that any customer you attract will fail to pay invoices on time, which could scale the problem in your business and restrict cash flow further.

Invoice finance reduces this risk, so you confidently grow your customer base.

It will also help you address the increased costs of a more extensive customer base (including expenditure on supplies and labour) through improved cash flow.

  • It grows with your business

An invoice finance facility is highly flexible. You will be given funding based on the total volume of your invoices, and the terms agreed with the lender.

As your business grows, the value of funding does too. More invoices will allow you to raise a higher sum. In some cases, you may be able to access more competitive terms for increased turnover.

It gives you a consistent funding stream as you expand and consistently maintain cash flow.

  • It’s cost-effective

An invoice finance solution is, on average, 17% cheaper than an overdraft.

Additional charges are made (including discount fees – interest rate over the lender’s base rate, service fees, trust account, chaps and BACS fees and credit protection charges), but these tend to be minimal.

With few costs associated, invoice finance is cost-effective. Businesses use it to manage cash flow and fuel growth without worrying about unexpected financial implications.

If you are seeking a way to improve cash flow in your business while empowering your growth mission, invoice finance is valuable in supporting both.

Call today to speak to one of the advisors, who will take you through the implications of invoice finance and arrange a solution while also reviewing your growth strategy to ensure maximum results.

Richard Olsen | UK Business Advisors (

Need advice & guidance?

We have advisors all over the UK. Get in touch today for expert guidance and support.