Invoice Finance: a no brainer for businesses looking to balance cashflow with growth

Over the next six months, we're expecting to see more and more SMEs turning to finance to support their cashflow. The current economic challenges will only amplify this need with global supply chain issues, rising interest rates, soaring inflation, fuel costs and upcoming tax hikes all posing as threats to the good progress businesses have made over the last 12 months.

Our research continues to reveal that a lack of working capital is one the greatest barriers to growth that a business can face. In fact, more than one in three UK business owners believe that access to finance will help them to take on and overcome the economic challenges 2022 continues to throw at them.

In a recent poll*, over 50% of the financial advisors and accountants we spoke to spotlighted Invoice Finance as a solution their B2B clients would likely turn to this year to release working capital, overcome challenges and grasp hold of new opportunities. But what makes Invoice Finance a such staple and popular solution in a time of economic turbulence?

According to our existing client base, 73% turn to Invoice Finance solutions to not only improve cashflow but to ensure that their employees, suppliers, HMRC and other financial commitments are paid on time. More than two in three told Time Finance that their Invoice Finance facility provides them with peace of mind and more financial freedom. Over half find this to be a more flexible solution than a bank facility, with the ability to increase or lower funding limits depending on their current and future plans.

The benefits don't just stop there. A good funder and financial advisor will ensure that their clients have a finance strategy in place to support their business when times get tough. Finance strategies need to take a holistic view - taking into consideration the firm's history, current financial commitments as well as future growth plans. At Time Finance, we do just that.

The burden of paying back loans taken out during the pandemic is a reality many businesses are facing, but this seems to be shadowed by current market challenges. It was only two months ago when 35% of businesses said one of their greatest concerns was the ability to pay these funds back. One in five of our existing client base said that working with an Invoice Finance provider has made financial forecasting easier, and 73% said that as a result they feel confident that their lender has a good understanding of their business and the challenges they will face through 2022.

But, it's not all about preparing for bumps in the road and building up cash reserves. A cautious approach might be sensible, but it can also risk leaving businesses trailing behind the competition. In fact, over one in three clients tell Time Finance that they take advantage of Invoice Finance to support their investment and expansion plans. Over the next six months and with financial support in place, 45% will look to invest in sustainable systems, operations, equipment and practices that strengthen their green agenda, whilst one in three will look to invest in fresh talent.

Invoice Finance continues to grow in popularity because of its personal approach to providing finance. Benefiting from a dedicated relationship manager and access to decision makers means business owners can ensure that money-making opportunities aren't missed and decisions can be made swiftly. So much so, that 91% of clients rank a relationship-driven approach as the most important thing they look for in a funder, compared with just 64% who rank affordability high up in their wish list.

There's no doubt that those clients who already benefit from Invoice Finance do so because it relieves the pressure on their cashflow and gives them the financial freedom to grow and thrive, even when things get tough. But when it comes to supporting a business, of course, there are a number of other financial solutions out there that might be more appropriate to their circumstances. It's key that those options are considered and presented to clients so that they are able to receive the right funding support from the outset. This is one of the core reasons why Time Finance offer a broad portfolio of solutions - from Asset Finance, to Invoice Finance, Commercial Loans, Property Finance and Vehicle Finance. It means that despite the challenges or opportunities lying ahead, we can help.

*Time Finance survey of SMEs & Financial Intermediaries in March 2022