Invoice finance is a great way for businesses to keep control of their cash flow by securing funding against their outstanding invoices. However, businesses often miss out on this simple and effective method of funding due to the myths that exist around it.
We’ve taken a look at five top invoice finance myths and how they compare to reality.
MYTH 1: “IT MUST BE EXPENSIVE”
Reality: Probably the most common myth about invoice finance is that it must be expensive. When people hear about flexible and fast funding that they can use whenever they need to, the assumption is that it must come at a premium.
In actual fact it’s often no more expensive than other forms of business finance like loans or overdrafts, and can work out cheaper due to the shorter term nature of the funding.
MYTH 2: “MY CUSTOMERS WILL BE CHASED FOR PAYMENT”
Reality: Another one of the prevailing myths about invoice finance is that the customers of the business will be contacted for payment and therefore would be made aware that their debt has been ‘sold on’. For many businesses, this is unacceptable and they wish to keep control of the customer relationships they’ve worked so hard to build.
Whilst this is something that is included with many invoice finance providers, at MarketInvoice we don’t contact your customers to chase for payment. In fact, the only time we would generally ever ask them for payment is if you were in default under your facility so, in the ordinary course, you keep full control of your customer relationships.
MYTH 3: “IT’S ONLY FOR BUSINESSES IN TROUBLE”
Reality: This couldn’t be more wrong. Invoice finance is a business funding solution that helps to provide cash flow for growing businesses in an easy and affordable way.
At MarketInvoice, we regularly feature success stories of our customers whose businesses have gone from strength to strength with the help of our funding.
Whether it’s preparing for a busy time of year or securing cash flow to take on new projects, invoice finance is an ideal solution for growing businesses.
Find out more about MarketFinance
MYTH 4: “I’LL HAVE TO FUND MY WHOLE SALES LEDGER”
Reality: Some businesses just want the flexibility of funding only certain invoices. For example, if you’ve got a particular customer who demands longer payment terms, or regularly pays late you might only want to finance invoices for that customer.
Whilst some providers do ask for you to finance your whole ledger, if you choose a provider which offers selective invoice finance you’ll be able to benefit from the full flexibility of using the service as and when you need to.
MYTH 5: “I’LL GET LOCKED INTO A LONG CONTRACT”
Reality: It’s all a matter of making sure that the service you choose is right for your business.
Some invoice finance providers can ask you to sign a longer contract, however at MarketInvoice we believe in providing the best funding option for your business.
MarketInvoice Select is a selective invoice discounting service which allows you to use it as and when you need to, and you only ever pay for the funding that you need. MarketInvoice Pro is a confidential invoice discounting service, designed for businesses with a more regular funding need and available on a 12 month subscription basis.
Have you heard any other invoice finance myths? Why not give one of our friendly team a call and we’ll help you dispel them and get the funding your business needs.