Looking to escape a restrictive overdraft but still want the benefits of improved cashflow?

Many businesses still fund their cashflow through a traditional bank overdraft. It’s only when they come to renew it or look for an increase, they may find their bank is unwilling to go the extra mile. Overdraft providers tend to base their underwriting decisions on past financial records rather than where a business is going. If the business is going through a difficult period, they can find themselves with facilities being withdrawn or at the very least see increased fees. Often businesses might also find themselves needing to provide increased levels of personal security to their provider.

Our range of award-winning Invoice Finance products can plug the cashflow gap and can usually provide twice as much cash as a traditional overdraft.

If the adminstrative burden of an Invoice Finance facility is a concern, our Ledgerlite facility provides a good alternative to a tradional bank overdraft. This facility can provide up to 50% advance against the debtor book but with a ‘lite’ touch in terms of admin. Simply provide an up to date ledger each month and we will set a funding limit you can draw cash down from, with no need to upload weekly invoice batches or to allocate cash.

Some of our brilliant clients have been able to experience the benefits of leaving an overdraft behind and taking on an Invoice Finance solution for their business. Alpesh Shah, Director of Mobility2You has recently started benefiting from our funding solutions and talks to us about how it compares to a bank overdraft:

“What I love about Skipton is that their solutions tailor to the success and slowdown of a business. When you have an overdraft, it’s a very static facility. Whether you have £40,000 or £400,000, it’s an overdraft,”

“With Invoice Finance, if you have a really successful month and you make a lot of sales, then your Invoice Finance literally parrallels that so you are able to draw down money. If you have a poor sales month, you don’t have to worry as your Invoice Finance is only going to lend you the money that is based against your sales ledger.”

With an Invoice Finance facility, an initial agreed amount is set however this can be changed if the provider believes it to be suitable. Often the funding limit will grow in line with your business’s turnover. A facility can make financial planning a bit easier as agreements made are for a fixed period and are therefore not repayable on demand.

Compared with a bank overdraft, the amount you can get access to with Invoice Finance is larger. With this option you can borrow up to 100% of an invoice within 24 hours of it being sent and therefore receive your money quickly. This option is good for businesses that might not meet the traditional lending criteria of banks such as those with poor past credit control and smaller businesses with fewer assets. In most cases, the only asset required to secure funding is the invoice itself. 

As with all of our advice, we suggest that you have a research into all the options and providers available to make sure that you will be using the right option for your business. Most finance providers will be happy to offer advice on the best suited option for your business.

At Skipton Business Finance, we offer a range of Invoice Finance products. Visit here for more information on the services we provide. Alternatively, you can email us at info@skiptonbf.co.uk or call us on 0800 0854150.