Invoice Financing Can Help Your Start-Up
Posted on December 01, 2014 in Factoring
Invoice Financing Can Help Your Start-Up - UK
There is a great deal of planning that goes into any business start-up, and the majority of the initial planning revolves around finances. A business plan is put together that outlines how much the company will need to get off the ground and then revenue projections are used to get investors interested in putting funds into the idea. The business plan becomes a comprehensive road map that is used to guide the business owner along his way towards what he hopes will be financial success. But whenever you look at any business plan for a start-up, the one thing that is always missing is a contingency on what to do about those inevitable past due invoices that will slow cash flow. It is a critical part of the planning process that often gets left out, and the business suffers because of it.
The problem with the average business plan is that it operates in an ideal world. That ideal world consists of clients who pay their bills on time and help to fund a cash flow that sustains the start-up almost from the day it starts doing business. The harsh reality is that there will be past due invoices to deal with and the cash flow for a start-up is neither sustaining, nor is it reliable. It is this lack of planning that forces small business owners to have to go back to investors and lenders over and over again to fill in the financial holes that outstanding sales ledger entries leave behind. 1st Commercial Credit has the solution, and it is a solution that can be utilized from the very first moment that a start-up begins doing business.
Invoice Financing Is The Ideal Financial Solution For Start-Ups
When an entrepreneur includes invoice financing in his initial business plan, then he is setting his company up for success. The entire purpose for invoice financing is to insure cash flow based on the value of invoiced sales. Every start-up owner would love to look at his sales ledger and know that the amounts on that ledger will wind up in his bank account on or before the invoice due dates. 1st Commercial Credit is an experienced financial organization that can put together an invoice financing program which will process all of your invoices and then advance you cash based on the invoice face values. There is a small fee per invoice, and then the rest of the cash is transferred directly to your company’s bank account.
When an invoice financing programme is put in place the moment that the company opens for business, then the company owner never has to worry about cash flow issues. Instead of looking at past due invoices that continue to pile up, he will see nothing but satisfied invoices on his sales ledger and that means a strong financial foundation for his start-up business. This is a process that gets your start-up off the ground with a reliable solution in place for funding future operations. When you put an invoice financing program in place from the very beginning, you avoid the need for other funding options that can be costly and unreliable.
A Relationship With 1st Commercial Credit Is A Good Business Decision
Entrepreneurs want to make the best possible business decisions, especially when they are just getting started. The average business plan allows for a start-up to rely on outside funding for the first six months of its existence. Once that six months is up, the start-up needs to be sustaining itself with its own cash flow, or else it has to look for more expensive bank funding options. Instead of worrying about financing the business after six months, a business owner that uses an invoice financing plan from 1st Commercial Credit will be consumed with planning future growth projects and looking to stick to the original schedule of expansion that was outlined in the business plan.
Invoice financing through 1st Commercial Credit does not rely on your business’ economic strength. The biggest problems that start-ups face is they do not have the kind of credit history they need to get ongoing funding from investors or banks. 1st Commercial Credit leverages the combined credit strength of your clients to approve invoices and advance you cash. Your start-up does not need a strong credit history to be able to benefit from invoice financing. All you need is a steady flow of invoices from creditworthy clients and you will be able to have the kind of cash flow you need to sustain your ongoing operations.
Invoice Financing Allows You To Take Those Big Steps Towards Success
A new business that works hard will be presented with opportunities that could help to propel the business to the next level of success. But, as most business owners know, those ground-breaking deals usually come with caveats that make them difficult to accept. For example, you may have a customer who asks for 60-day terms on a deal that is larger than any deal your company has ever seen. As a start-up, you do not have the funding to handle such a large deal and you may have to consider turning the deal down. But when you work with 1st Commercial Credit through an invoice financing programme, you can take that deal and know that you will get the funds on or before the invoice due date.
Cash in the bank is always something that start-ups dream about. It can take months for a start-up to break even and then even longer before it starts to see excess funds in its bank account. The reason it takes so long for a start-up to see a profit is because of the cash flow issues caused by outstanding invoices. Invoice financing removes those cash flow issues and allows you to build up a strong bank account that puts your company in a great financial position. All of the plans that you had outlined in your business plan can be funded by your company’s own invoiced sales, and that goes a long way towards establishing your organisation as a strong competitor in your industry.
Balance The Financial Scales In Your Favour Right From The Very Beginning
Entrepreneurs give up their lives just to get a start-up off the ground. Just when the sales ledgers look like they may show a profit, past due invoices slow cash flow and the entrepreneur is faced with the real possibility of having to extend his debt by borrowing more money. But who is going to lend money to a start-up? If the entrepreneur manages to find a lender interested in giving him money, there will either be a high interest rate attached to the funding, or the entrepreneur will have to give up a portion of his business just to keep it going. That is why so many start-ups find it difficult to persist in today’s world.
You can balance all of the financial scales in your company’s favour when you take on an invoice financing plan from 1st Commercial Credit. As soon as you get invoices coming in from your sales department, you can start scheduling payments with confidence because you know that 1st Commercial Credit is going to turn those invoices into cash. If you try to grow a start-up without an invoice financing programme from 1st Commercial Credit, then you are going to find yourself in an uphill battle that is difficult to win. But with the help of the professionals from 1st Commercial Credit, you can have the advantage of a strong cash flow that will allow you to move your start-up into the realm of major player in your industry.
Don’t leave out invoice financing from your initial business planning process. If you want to be competitive and stay focused on meeting your corporate goals, then you need a reliable cash flow to get you there. With an invoice financing plan from 1st Commercial Credit, your start-up has the advantage it needs to be viable in a competitive business world and achieve the levels of success that you had dreamed of when you first put your idea to paper.