Recruitment Insights

4 ways to scale your business with invoice financing

July 27, 2022
4 ways to scale your business with invoice financing

Your business is going well; you have work coming in and a team of skilled professionals delivering good service to your clients. You want to grow and expand further, but to do that, you must scale your business first. You need more talent and resources, which come at extra costs. If much of your cash flow comes from project work that relies on clients paying their invoices on time, you might struggle with securing the cash needed.

Invoice financing can be an excellent solution for businesses that are growing quickly and need working capital to fund their expansion. With access to extra funding, you can invest in new products, hire more staff, or expand into new markets. Here are four ways Invoice Finance supports you in scaling your business:

Overcome cash constraints

Cash constraints stand in the way of scaling your business. When you do not have optimal cash flow, you cannot bring in new staff, which means you cannot accept more jobs, and your business remains stagnant.

Businesses that provide services and make money when invoices are paid by clients often experience these constraints because they wait between thirty and sixty days for a client to pay an invoice. When your business model relies on these processes, you need another source to release cash tied up in invoices.

When you release cash constraints on your business, you have an opportunity to boost your profitability by hiring more people, expanding your services and taking on more projects.

Invoice finance removes these cash constraints by providing the funds needed to support your business while you wait for your clients to pay you. Instead of chasing clients or struggling to pay staff, you can focus on managing and scaling your business without running your company invoice-to-invoice. You will also better protect your business from the impacts of bad debt and late payments by ensuring you have a healthy cash flow.

Avoid bank loans or overdrafts

Traditional bank loans take longer to obtain, generally require your business to provide collateral and are often unobtainable to young companies without a credit history. Yet, loans might be necessary to unstick your cash flow and scale your business.

Invoice finance is often easier than securing a traditional loan or overdraft. You apply for funding and can access the cash needed within twenty-four hours once you have started your relationship with the invoice financing company.

Invoice finance uses your issued invoices as collateral, meaning you can access funding against the value of your unpaid invoices. You avoid the risks of bringing core debt into the business; you already have the money, it is just temporarily stuck in unpaid invoices. In addition, invoice financing does not impact your credit score, so it will not hinder you from other financing requirements.

Invoice finance can be an excellent option for businesses looking for a way to scale. Access to additional funding without the pains of traditional bank loans enables you to invest in new opportunities and expand your operations.

Hire more talent with invoice financing

Scaling requires you to take on more work while maintaining excellent service delivery. Your business will struggle to provide good service when there is too much work and not enough people to cover it. To scale, you need more people and the funds to pay them.

When you are already waiting on clients to pay invoices so you can pay your current staff, hiring more people seems like an unrealistic endeavour. Invoice financing provides you the funding to confidently hire people, so you can expand your business even when your customers pay late.

Flexible funding to suit your needs

Your business likely will not always need the same amount of funding. At times, you might only need some invoices advanced, and at other times, maybe when your BAS is due, you may need an advance on all your invoices outstanding.

One of the great things about invoice finance is that you can tailor it to suit your business’ needs, whether you need a one-off cash injection to help with a big project or ongoing funding to help you manage your cash flow more effectively. You can leverage it to cover many business expenses, including office rent, payroll, new equipment, advertising, etc.

A robust invoice financing solution should also offer integration with your existing timesheet and payroll systems to ensure you have quick access to funding when you need it. For example, at APositive, we offer full integration with your timesheet and payroll systems and can also support you in managing your payroll. When you have these functions taken care of, it supports you in better scaling your business.

APositive’s Invoice Finance solution

To scale your business, you must overcome cash constraints to hire more people and expand your services. Invoice financing can be the boost that helps you scale your business so that you can focus on its growth. APositive has the experience to help you take on this challenge.

Our Invoice Finance solution provides you access to the money stuck in unpaid invoices. Rather than waiting up to 60 to 90 days for the cash you need, you can access it the same day you raise your invoices (subject to meeting criteria).

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