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Invoice Factoring for Small Business

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How Invoice Finance Helps to Grow Your Business

The success of a business enterprise depends on how well an entrepreneur can manage the cash flow of the business. The ability to maintain a healthy cash flow is a challenge for every business organisation. This is regardless of what industry the business enterprise operates in and its turnover. One of the most critical factors that determine whether a business enterprise will succeed in the market environment and maintain its momentum is cash flow. Many businesses fail or go into liquidation because of inadequate cash. This is in spite of the fact that their clients owe them large amounts of debts.

Many businesses fail to realise that their sales ledger and outstanding invoices can be a value source of generating liquid funds for their working capital. Invoice finance helps entrepreneurs to bridge the gap between the time the enterprises make their sales and time they receive payments. Click here for more information.

Under an invoice finance arrangement, an invoice financier will release instant liquid funds to the business organisation against its outstanding invoices. The financier after inspecting the outstanding invoices will release cash funds equal to eighty to ninety percent of the invoice value to the entrepreneurs of such businesses. The remaining amounts are paid to the entrepreneurs as soon as the clients clear their dues and after the financier has deducted his commission and expenses.


Unlike other forms of business financing, invoice finance is a flexible financing solution for all businesses regardless of their size and the industry in which they operate. As long as the business organisation, sell their goods or provide services to other businesses on credit, it will be entitled to this form of finance. The payment terms of such invoices are between the thirty to ninety days. Get more details on ABR Finance Pty Ltd and grab business loan as per your need. 

The instant cash funds released from this form of financing generate the necessary working capital for the growth of the business. Moreover, under invoice finance, the facility grows in line with the sales generated by the business. This means that as your business grows, you have more access to liquid funds as an entrepreneur to invest in your business. This is why invoice financing is becoming a popular form of financing for small and seasonal business enterprises.

How does invoice finance works

         As an entrepreneur, you make a sale and raise an invoice on your customer. You then send this invoice to your invoice financier who will verify it;

         The invoice financier will release liquid funds equal to eighty to ninety percent of the outstanding invoice value within twenty-four hours; get more help here. 

         The invoice financier will then take up the responsibility of credit control and recover the amount from your clients; and

         You will receive the remaining balance of your invoice less the factoring charges once your clients have cleared their dues.

The main advantages of invoice finance are as follows:

1.      Invoice finance improves the cash flow of your business;

2.      As an entrepreneur, you can extend your terms of payment to your clients;

3.      Your business enterprises has access to instant cash funds within twenty-four hours

4.      Invoice finance has a simple application process when compared to other form of financing.

Invoice finance is a blessing for small and medium businesses to grow and expand.