In our recent survey of invoice finance users, one business described invoice finance as:
“a secret gem hidden under a pile of overdrafts, loans etc.”
In that same survey, 22% of respondents thought that a lack of awareness and promotion of invoice finance had led to low numbers of businesses benefiting from it.
Invoice finance releases the cash that is tied up in the unpaid sales invoices of a business. It is particularly popular with recruitment businesses as that cash can be used to meet the payroll, or indeed for any other purpose.
FundInvoice offers the UK’s 1st research based, free, independent invoice finance quotation search and advice service. Price was one of the key drivers that we identified within the decision making process around using invoice finance. This led us to conduct mystery shopper research amongst a selection of invoice finance companies, to identify the best deals for clients.
We have been able to use the results of that research to help save 4 out of 5 businesses money on quotes received elsewhere. We have managed to:
Save our clients an average of 37% on the cost of invoice finance.
In another survey of new start up businesses, we were told that 31% of them had suffered funding restrictions which had lead to a variety of issues including: growth restrictions, struggling to pay creditors, employees and tax. Despite this only 4% of those with funding restrictions had even considered invoice finance, mainly because they either didn’t think it would be an option for a new business or they hadn’t heard of it. There are however invoice finance companies that specialise in helping new start up businesses.
The market segment where we did find a large proportion of businesses using invoice finance was what we termed the “fast growth” sector i.e. those that were growing their turnover by 20%+ over the last year. 12% of that segment were found to use invoice finance and we also identified a sub-set of businesses that said that they couldn’t grow any faster, even with access to further funding. We termed this sub-segment the “maximum growth” sector and we found that 52% of that group within our sample were using invoice finance.
Interestingly, in both our survey of new start ups and of fast growing businesses, those experiencing funding restrictions were all found to be using some combination of overdraft, loans or family money to finance their businesses.
100% of those that told us they already used invoice finance said they had access to all the finance that they needed.
Monitoring customer satisfaction scoring is also a key part of what we do, so that we understand how different service offerings compare. FundInvoice are currently “Finalists” for the Business MoneyFacts Award for the Best Asset Based Broker 2015, recognising the work that we have done to champion customers within this market.
If you would like to find out how much you could raise through invoice finance, and what the best price we can find you is, please call us, in confidence, on 03330 113622. Alternatively, visit our website at: http://www.fundinvoice.co.uk where you can also subscribe, free of charge, to our monthly e-magazine. It includes the details of our research findings, special offers and discounts that are available.
By Glenn Blackman
The research from which this article was constructed can be found on our website.