Is your Business growing in the UK? If  so, in due course you will need business financing or invoice factoring. Naturally, if you’re like the majority of small business owners, your first idea might be to look for a business bank loan.

The downside of this is in these current times banks are lending as much as they should and business loans and business factoring can be very hard to get, may take a couple of weeks to set up and don’t really provide a solution to most businesses. You may be better off looking for alternative business financing products.

In addition, accounts receivable factoring is an important part of your finance office, giving you working capital by factoring your invoices.

I am going to show you two alternative business financing products. As opposed to the traditional business loan, they are easy to obtain, can be set up in days, and they grow as your business grows.Invoice Factoring . If your biggest business financing, lets face it its challenging in so much that you have clients who take as long as 60 days or more to pay their invoices, which is less than ideal for the small business, so then the answer could be factor your invoices. What is factoring I here you ask, well Factoring, or invoice factoring as it is often called, provides a solution to cash flow issues whereas you normally present the invoice from your client and get an advance of up to 80% thus cash on the spot.instead of waiting for ’invoice payments and thus handles your cash-flow. Invoice factoring is the key.

Invoice Factoring

Many companies offer factoring services, not just banks.Factoring does not involve changing your customers’ payment habits but often on your invoice the factoring company will insist the invoice is paid to them as you are selling the bill to the factoring company itself.With factoring, you can capitalize on your invoices pretty much straight away hence covering your pay and employees pay.If you are a reseller or wholesaler and your biggest challenge in business is that you cannot afford to pay your suppliers on an immediate basis, then purchase order financing is the best tool for you. Purchase order financing gives you the money you need right now, hence you can pay your supplier on the spot or the same week. A bank may also forward you a letter of credit with your suppliers guaranteeing you can pay them for services or goods rendered your suppliers This enables you to buy the goods to fulfill your orders and make the sale knowing you can pay for it..Both purchase order financing and invoice factoring can be obtained from a factoring company (rather than a bank whose charges may be considerably more). if you own a business that needs financing, be sure to look at these non-traditional business financing tools. There are many factoring solution’s in the UK, do shop around for the right financing package to suit your companies needs.

A point to remember:

With a factoring company, they will forward you up to 80% of the gross amount, if your client then defaults on the invoice, your facing a charge back on your account. Do survey at least five factoring companies as there service is variable indeed.Invoice factoring is ideal for a growing business if used wisely.

FAQ and Summing up

The 2 options are get the client to pay with order or there is Invoice factoring.

What is Invoice Factoring

Simply put, invoice factoring equals cash flow. You submit your invoice to the factoring company, they in turn will advance you up to 60-80% of the funds straight away. So for example the tweety biscuit company fax’s an invoice to the factoring company for £2000, then a couple of hours later (after the factoring company has verified the order) you can go along and collect your cheque. Really as simple as that.

What does Invoice Factoring cost though?

The cost is agreed initially with you by the factor company and its usually 5-8% of the invoice value. In reality, you are selling the invoice to this company and in the event your client breaks there agreement, the factoring company will chase it to a degree.. but there are minus points..

If your client does not pay the bill, the factoring company will usually instigate a “charge back” to your account, meaning your account will show a minus figure. This can have a dire effect on your cash flow off course, however if you run a credit check on your client prior to accepting there order, this will reduce your risk of supplying them.

So to sum up; yes invoice factoring is a good idea, just make sure you read the small print ect before committing yourself to an agreement.

Invoice Factoring.

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Funding Small Businesses

Ok,so money we all need it and we need it to start a company. What options are there in the UK for Small Business Finance?

would a loan do the job? perhaps use your savings… lets take a look at what’s what with regards to finance for small business in the UK and see if we can sort this out.

Please bear in mind, the view on all pages on this site is that of the author, please always seek professional advice before entering into any financial commitment of any kind. The data set forth is one approach, there are many options open and a good independent business adviser may offer a solution best suited to your circumstances for funding your small business.

Money the route of all progression

So you have the business idea, you decide perhaps to work from home now all you need is some money to fuel the idea. The obvious would be perhaps some savings for a rainy day, but there are other options: Bank Loan to finance your small  business – Raising Finance for your new venture.

Sources of Finance for Small Business

Yes we started with the obvious one, but maybe this is because its the one solution most people think off first. So you can choose to go and see your bank manager, the one disguised as a computer, put forward your business plan and hope for the best. Lets say you forgot to pay your water rates and a small arrears shows up, what then well depending on how nice my bank manager is he may help you then again he may be Mr. politically correct and give you nothing leaving you slightly upset.. but and there’s always a but, you can always get an overdraft, this is flexible and if you have done your homework on the product you are going to sell you can pay this off in no time. It would appear banks are more inclined to perhaps offer you an overdraft, you just have to not appear to eager and to a degree play hard to get to nail down the best terms to suit you. Additionally, shopping around is a must for the best deal. Lets crack on with small business finance solutions, there is also small business grants and loans etc.

Small Business Finance

Regional Development Agencies – Maybe Better Than A Bank Loan for your small business finance

If you have a great idea and need to raise finance there is a branch of the UK government who may be able to help. This is known as the regional development agency UK, it deals with business growth , help and support and funding. You might have a great idea, and this is another way to raise finance. The phone number for the Northern Regional Development Agency is : 0845 0066 888 and the Southern Regional Development Agency is : 01223 713900 Getting a grant for business UK Government – EU Grants
Business Finance to get started

Ok,so money is a valuable commodity and to form a business its nice to have a business grant, help with start up costs and the like. You can search through lots of websites and not find the information you require.. the search ends here and we don’t charge for it.
What’s a small business grant then?

Well a small business grant is there to hep you start your business in a nut shell. As you may have already found, there are lots websites offering to provide you information and the like for a fee, thankfully we don’t charge you any fee, just provide the information we have found for you to inspect
What kind of business grants are available?

There are many types of Grants available funding for various types of business from a sandwich round to a Building company etc.. the problem we faced when looking at this types of funding was to establish who offers it. At first, the likely route would be BERR – UK Government office, however I found this was not the place for a grant, It took me over 3 hours of research to find you the data so you can apply directly and found it I have;) To find out more vist our UK / EU Grants Page

Small business finance solutions from YBS.