Many small business and SME owners are still unfamiliar with alternative business finance solutions to the traditional bank funding lines, new research by credit experts Experian has revealed. Even though invoice finance has continued to see a boom in popularity in 2012, there are still plenty of businesses eligible for such facilities that aren’t aware of invoice finance and its potential to boost cashflow. Knowledge of invoice finance amongst business owners was said to be poor by the report, whilst few small businesses actually shop around in their quest to secure an external funding line. But a lack of knowledge of alternative finance solutions isn’t due to lower demand, as more than 60% of the 300 respondents to Experian’s survey had sought external funding in the last year. The news came after it had emerged yesterday that more than four in 10 applications for bank funding are now being rejected, according to the Federation of Small Business (FSB), with 42% of loan applications being turned down in Q3 of 2012, in comparison to 40.6% in the previous three months.
What is Invoice Finance?
Invoice finance is the sale of a business’s unpaid invoices to an invoice financier such as Skipton Business Finance for a payment equivalent of up to a 90% of the value of invoices. This enables the business to get instant access to the cash they’ve earned, when normally they have to wait 30, 60 or even 90 days for debtors to settle invoices and consequentially for the money to appear in their bank account. Why not find out more about the types of business suitable for invoice finance, or give us a call on 0845 602 9354 for a chat and no-obligation quote.