Invoice finance has been disrupted. Leading this mini-revolution is Marketinvoice, one of the UK’s most innovative alternative finance businesses. Co-founder Anil Stocker is at Real Business Funding to outline what invoice finance can really do for UK SMEs. What has happened in the industry recently? Did you keep up? The number of companies in the UK using this alternative source of funding is steadily on the rise, especially now that modern versions of it make it much more transparent, easy, and flexible. Find out for what businesses/sectors/stages of the business journey invoice finance is ideal for; and how to best tap into this source.
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High street banks offer factoring and invoice discounting, a product that is underutilised because it has a very bad reputation. People associate it with struggling businesses. But it can get a business a lot more money than an overdraft can – it’s a link to your revenues.
“We looked into the future and saw the emergence of new online systems and forms of finance that are going to sit alongside the banks. It brings a diversity of choice to SMEs that didn’t exist in the past,” says Mills.
Companies on MarketInvoice selectively sell their invoice to large customers. It’s fully flexible; in the past, companies had to put all their invoices through a facility, with no element of choosing when they want to use it. “We allow them to dip in and out whenever they want to, and there’s no fee when they don’t use it. Some companies use us every month, some are very seasonable. We offer confidential service, so your end customer doesn’t know that you’re raising money against the invoice. And finally, in a time when banks are taking more and more security, we don’t take any personal guarantees.
“We can’t help companies that are at business plan stage. We insist on an at least six months trading history. All companies that use us have to have a blue chip debtor book.”
MarketInvoice has about 60 funders who are providing capital, from around the world. A lot of businesses that are using the service are exporting to these places. “The average auction is about £50,000. Typically, buyers are paying a one per cent invoice face value per 30 days.”
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