Heard of invoice finance before?
Invoice finance is about bridging the gap between when you issue invoices for work and when you finally get paid.
With various invoice financing solutions available, it allows you to continue trading by borrowing against these outstanding invoices. In turn, you may pay a small percentage of the final invoice amount as a fee to your lender.
I recently spoke with a Company Director who mentioned in passing that they were about to move their Invoice Financing from one lender to another due to a problem with their existing account manager, who never really ‘got’ their setup in the first place.
While it’s great they were proactive, my first thought was, uh oh, they’re jumping out of the frying pan, right into the fire.
Why? Because when invoice finance goes wrong, it goes bad, fast. This director arranged both their old, and new finance based on just four things:
- How much does it cost
- The percentage advanced
- The finance company
- And what the salesman said!
Now, good luck to them. But, like many experts in their field, after hearing about their new lender, I’m about 90% certain they’ll have trouble with them.
How? Consider this.
Take two fishermen, for example. The first chap hasn’t cast a line in his life, but he enthusiastically buys all the gear and heads to the river.
Compare this with the weather-hardened old hand, sitting quietly at the side of the water. He’s been practising the same techniques every day for the last 25 years.
Who would catch the most fish? Beginners luck may well play a part and help the first chap, but the old hand knows where to fish; he knows the underlying issues and currents and knows exactly what to do to practically guarantee a bountiful catch.
Well, the same applies to business loans and invoice finance.
Only an experienced ‘old hand’ in the business finance world will see where a newbie director may be going awry when applying for new finance.
And that’s fine; it’s not their job to know this after all.
So, what’s the solution?
Ask the old hand for some advice.
I know where the big fishes (lenders) are, and I know how to drastically improve your chances of attracting one with your finance application.
Within 5 minutes of speaking to a client, I usually know which finance company is likely to suit them best.
Essentially, there are over 70 finance companies who will lend you money on your invoices, and they all have their own “Sweet Spot” for the right client.
The bottom line, if you’re looking for finance right now, give me a call.
Book a free call in today, tell me what’s on your mind and let’s bounce some ideas around.