INVOICE FINANCING Essential for Business
Cash Flow • Cash flow is the backbone of any business in today’s world. • Constant and trustworthy revenue is the ultimate success mantra for a company. • The business which does not fall prey to the fluctuating demand and supply are safe and can fulfill their basics like staff salaries and material costs. • Maintaining a healthy working capital in Indiais difficult to achieve because of higher competition.
Problems • Most companies running short of cash mostly turn up to the banks and other financial institutions for funds, which can be in the form of fixed-term loans or overdrafts. • Due to their uniform policies for all businesses whether big or small. • It proves to be a rigid formula in today’s complex market situation. The budding businesses require some flexible policies which can help them in their growth.
Go for Invoice Financing • All these restrictions have opened up the way for invoice financing which is a way of vendor finance in India. • It provides the facility of procurement of funds as soon as the invoices are raised • This way the business is able to meet their cash flow and grow simultaneously.
Types of invoice financing • Invoice Discounting- Invoice discounting in Indiais the technique in which the lender provides upto 90% of the total amount of the invoices to the lender and the responsibility of managing and receiving the payments is taken up by the client itself. • Invoice Factoring- It is almost the same as invoice discounting; the only difference is that the responsibility of managing and receiving the payment is with the lender itself.
Advantages of invoice financing • Smoother cash flow- It helps the business in getting rid of the worry about timely payments by the vendors. • Flexible policies — Invoice financing is based upon the amount of business we do, the more we do the business the more we need such funds. • New investments — It can also facilitate the small businesses to procure new technology and projects which can ultimately reduce their overhead expenses. • Frees up time- In invoice factoring the lender takes the responsibility to manage and procure payments from vendors, this frees up some valuable time for the client to focus on core business.
Priority Vendor • Small business can flourish through their policies. Does your start-up need funding? • ContactPRIORITY VENDOR which is known to be the pioneer of invoice financing in India.