In 2005, when we were starting out, overdrafts and term loans were not freely available and we did not have a balance sheet asset base that the banks liked. The only asset we had was invoices.
We went down the invoice discounting route with RBS and have never looked back. From a standing start in 2005 we are now a business with a turnover north of 30m and an expected profit this year of around 6m.
With growth that fast, invoice discounting allowed us to grow without speaking to the bank every minute, and we still use it to help us fund developments and acquisitions. Invoice discounting should not be something that is frowned upon, or in fact shied away from.
It is something that can help you grow the business and can be very cheap. In my eyes it should viewed in the same way as property. It is still an asset!
Richard Grethe FCA is the FD of Focus Pharmaceuticals