If you’re planning a new business venture you’ll know that the first few months are crucial to ensure your venture survives long-term. A relatively high percentage of new businesses don’t make it past the first year of trading, and no-one wants to be another failed start-up. Perhaps the biggest hurdle you have to overcome in the early days is cash flow – if you don’t have it, your company won’t be able to operate.
Raising Working Capital
Invoice finance used to be the domain of established businesses trying to raise more cash, but start-ups are increasingly looking to it as a cash flow option. With banks tightening up their lending procedures, invoice factoring services are increasingly filling the gaps. Some have even adapted their products to meet the needs of new businesses.
Even if you’re not actually trading yet it’s worth exploring the invoice finance options available. An invoice finance broker can help you find the best deal from day one, meaning that you could receive cash for your first invoice within a day of raising it. This is a very attractive option when the alternative is waiting several weeks for your customers to pay.
There’s more to working with an invoice finance lender than just getting your hands on cash. Many lenders offer extra support, like credit control and bad debt insurance. This frees up your time to run your business as you’re not chasing payments, and gives you added protection against customers who may not pay at all.
If your company grows in size and you have more resources, you could move onto an invoice discounting arrangement where you manage your own sales ledger. There’s a lot of flexibility so if you’re a brand new start-up or you have several months of trading already behind you, you’ll be able to get a deal to suit your needs.
Some lenders can even supply you with business advice. It’s in their interest to see you succeed after all, and with years of business knowledge it can be a beneficial partnership at a time when your start-up needs a little extra support.