• 20 August 2020
  • cash flow management|fintechsg|invoice financing|sgsmes|SME financing

Benefits of Invoice Financing


The success of every business is determined by one single factor – proper cash management. Cash flow is the lifeblood of every company no matter the size and age, and it’s a common issue that business owners will have to manage, particularly in industries that trade with clients on credit terms. 

That is where Invoice Financing comes in – effectively bridging the gap between at the point of sale and payment received from your buyer which generally ranges anywhere from 30 to 120 days. 

Here are the top five ways on how Invoice Financing can benefit your company and how it can change the way you manage your cash flow for good. 

1 – Immediate access to cash without taking up a loan 

Traditional loans are generally carried on the balance sheet and serviced with monthly interest charges. The biggest difference between a traditional loan versus invoice financing? It does not require long term committed contracts and simply put, pay as you use. Since invoice financing is not considered a loan, it does not appear on your balance sheet as an expense, allowing you the benefit of a loan without the traditional downside. 

2 – Say yes to new opportunities

No matter the scale of the project or a new deal undertaken, there is always a certain amount of costs incurred and payment is often subjected to credit terms. That means your cash flow will be affected and money may sometimes be tight. Invoice financing allows you to take on newer and bigger contracts without putting a strain on your cash flow as you are able to get immediate access to funds without having to wait for payment. 

3 – Your business can invest in growth

The opportunities for growth become limitless. With cash flow worries out of the way, you can look forward to new sales, marketing initiatives, equipment for expansion to additional inventory. This can also mean a possible foray into a new market with new offerings. 

4 – New and improved stronger credit 

Thanks to cash in hand, you can take advantage of your supplier’s discounts with faster payment and even negotiate better payment terms once the rapport has been established. 

5 – Increase your company’s competitiveness 

On the other side of the coin, you are now in the position to offer better payment schedules to your clients. It sure is a better way to attract new clients while keeping old ones loyal to your company. 

Get started 

Validus can help your business access up to $500,000. Learn how we can help with your cash flow and check out our loan calculator here

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