New government measures announced this week will free businesses from restrictive clauses that prevent them from gaining access to invoice finance.
The move, which comes into effect from early 2016, will provide a route to additional funding streams and specifically benefit SMEs.
Invoice finance allows businesses to apply for funding using invoices for money owed to them. This often means quicker access to the cash than if they waited for a customer to pay them.
Around 45,000 businesses receive more than £19bn of funding in this way at any one time, according to figures from the Asset Based Finance Association (ABFA).
Whilst invoice finance is not the answer for all firms, removing the restrictions on which suppliers can be approached for invoice factoring means thousands of firms will benefit from faster access to funds. This will help to prevent ongoing excuses regarding late payments, with the amount owed to SMEs recently reaching £26bn. An estimated £10.8bn a year is now spent on attempting to recover these overdue payments.
Asset finance is another popular funding stream that’s also on the rise. According to the ABFA, the asset industry is on course to lend more than £20bn to UK and Irish businesses by the end of 2015.
It has been claimed by the industry body that asset finance is a ‘breath of fresh air’ to businesses, particularly in an era when bank funding is proving increasingly difficult to source. With a number of funding options available, including refinance, leasing and hire purchase, asset finance deals can be tailored to your business, ensuring the funding provided meets your exact needs and wishes.
With uses raging from tackling HMRC debt, funding mergers and acquisitions, improving cash flow and enabling the purchase of costly equipment, see how Praetura Asset Finance can provide a helping hand to your business by calling 0333 323 7800.