Our Recent research has discovered why companies are so keen to choose invoice finance products.
Close Brothers Business Barometer asked over 900 UK SMEs their reasons behind selecting invoice finance or asset based lending as an alternative to bank loans and overdrafts.
Opt for Invoice Finance
Before opting for invoice finance, a quarter of firms were interested in the product because they thought it may be cheaper than other options available. Meanwhile, another quarter wanted a fast way to access cash, and believes this type of funding is a quick option.
The responses indicate that company chairmen are motivated by cost of the product, with a third hoping it would be an affordable option. Meanwhile, over two thirds financial directors/CFOs were driven by the speed of acquiring funding.
Once companies have invoice finance their motivations behind using it change. The majority of respondents found the product simple to use in practice, and cite this as their main reason for continuing to use it. Additionally, one in five firms believe it is the best way to access cash.
Why are SMEs Looking for Finance
Why are SMEs looking to take out finance in the year ahead? 47% company chairmen would like to invest in new equipment, while 48% CEOs are looking to hire new staff. Products such as invoice discounting or factoring allow a flexible way to fund these investments, as the amount borrowed can grow along with business. Asset based lending is an additional option, where invoice finance is coupled with capital released against other business assets such as stock, property, and plant and machinery. Asset based lending is ideal for larger businesses looking to raiser higher amounts.
Working with a partner such as Invoice-funding.co.uk and Close Brothers has many benefits, including access to personal advisors who can help find the right business funding with industry-specific financial planning, Their IDeal platform is a great solution for simple access to capital to aid growth through invoice discounting.
If you would further help with Invoice Finance products for your business please view our website.