Cashflow Finance or Invoice Finance and how it can drive business growth

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Cashflow finance or invoice finance is a form of funding that allows businesses to access cash which is locked in their assets such as receivables, inventory or equipment. Instead of waiting for customers to pay invoices or for sales revenue to come in, businesses can use cashflow finance to cover expenses, invest in growth, or manage day-to-day operations. Sometimes other assets can be used like inventory or equipment and this is called asset-based lending.

Cashflow finance typically involves a lender providing funds based on projected income, such as:

• Accounts Receivable (Invoice Finance): Borrowing against outstanding customer invoices. This is sometimes known as Receivables Finance or Factoring. The lender will purchase your invoices at a discount.
   
• Asset-Based Lending: This is where a lender will provide funding against receivables, inventory, equipment and (sometimes) intellectual property.
   
• Working Capital Loans: Short-term loans based on cashflow forecasts.
   

These solutions are especially helpful for businesses with strong revenue but seasonal or uneven cash flow.

• Improves Liquidity: Access funds when you need them, without waiting.
   
• Flexible Repayment: Often linked to your business’s income stream.
   
• Supports Growth: Invest in opportunities without straining cash reserves.
   

 Cashflow finance/Invoice Finance is ideal for businesses that:

• Face delays between delivering products/services and getting paid. The company may also use other assets as security and this is called asset-based lending.
   
• Experience seasonal demand or irregular income
   
• Are growing fast and need capital to scale
   
• Want to avoid giving up equity to investors