When is the right time to obtain Invoice Finance?
The time to finance is before your business experiences growth, so that working capital is available when you need to pay creditors, wages or upfront expenses to supply the goods or services to the customer. There are different stages in a business.
- If you start a small business, you need working capital to fund setting it up and getting the business into a position to trade. Often the setup costs includes legal costs, accounting costs, developing a business plan, a fitout of the premises, a vehicle and equipment for the business such as computers and printers. Beyond this point, external funding will often be required to fund further growth of the business.
- You have set up your business and finance is now required to begin trading. This finance is typically equity finance from shareholders or debt finance from shareholders, related entities or third parties.
- Third party funding will most likely come from a friend, relative or investor. At the start-up phase of the business, bank and finance company funding can be very limited, as the owners/business may not be able to meet the funding credit criteria.
- So, at this point, your business is up and trading and the business is going well, but you really need more funding or cash flow to achieve your sales growth targets