Many small-to-medium sized enterprises (SMEs) are still unaware of such alternative finance solutions as invoice finance, according to a survey of 2,000 SMEs across the UK. Owners of SMEs were asked about what they knew of various sources of finances such as overdrafts, government-backed schemes and invoice finance. Unsurprisingly 98% of businesses were knowledgeable about business overdrafts. However, only just over two-thirds of businesses indicated an awareness of invoice finance. It may be that a lack of understanding of how alternative solutions work is preventing SMEs from utilising such facilities, which are often available to firms who may not have had much luck getting funding through the banks. The majority of small firms (73%) say they have a good understanding of business loans, but only just over half understand how invoice finance works.Richard Leathley, Corporate Manager for SBF, said: “SMEs need quick and easy access to finance to be able to grow their operations, fund expansion plans and help drive economic recovery across the UK.”
"Alternative solutions such as invoice finance are often able to do just that, but small businesses may not be aware of the options that are available to them", he concluded.
What can Invoice Finance be used for?
Businesses were also asked when they may consider turning to alternative forms of finance, with popular reasons including to fund corporate acquisitions and increase the amount of working capital available to the business. Invoice finance solutions, such as invoice factoring and invoice discounting, are extremely well suited to business transactions and are effective at increasing the levels of cashflow in a business. As they grow in line with a business by providing more available cash per invoice issued, such facilities are ideal for growing businesses who issue invoices. If you’d like to find out more about how our facilities work, why not check out our Invoice Finance FAQs or alternatively take a look at our infographics on invoice discounting and factoring.