funding solutions tailored to your business

In 2022, many businesses have limited breathing room when it comes to cash flow. This is thanks to inflation and rapidly rising prices, especially in regard to fuel. Logistics and warehousing businesses are feeling the pinch more than others because they need vehicles on the road in order to operate.

The side-effect of rising costs is many companies are now struggling to pay their bills on time. This has triggered a domino effect of late payments — it’s difficult for anyone to pay their suppliers when they have so many overdue and unsettled accounts of their own.

invoice financing can ease the squeeze

Warehousing and logistics businesses facing rising costs and late bill payments are in desperate need of cash so they can keep operating.

This is where invoice finance is an easy solution.

When a business uses invoice finance, it can get a significant percentage of the money it is owed on invoices within 24 hours. There is no need to wait the full 30 or 60 days allowed in the payment terms.

When a warehouse and logistics business uses the right provider, it can establish a ‘set and forget’ style arrangement that will pay 75-85 per cent of invoices as they are issued, even daily if necessary.

Starting from as little as $25,000, businesses can easily leverage their invoice finance arrangement to access near-instant cash flow.

a success story

driving business to its destination and beyond

See how our invoice finance product helps this freight service company tackle their ongoing cashflow challenges.

invoice finance versus line of credit versus business loans

Many businesses fail to explore invoice finance as an option, either because they are not aware of it or because they don’t understand how it works.

Invoice finance is different to a line of credit. It has similar flexibility but can offer a far more competitive interest rate (thornmoney, for example, charges as low as 6-10%, while lines of credit can charge interest up to 26 – 30%).

The other advantage of invoice financing is it can grow with the business’s needs. Once an arrangement is in place, cash can be accessed regardless of the amount the business is owed. A line of credit tends to have a lower cap.

A business loan is also for a fixed amount. It can be leveraged to pay for one or two outstanding invoices but the process will need to be repeated for subsequent accounts. There can also be the issue of needing to secure a business loan against an existing asset. This is not the case with invoice finance.

Find out how invoice finance can be a better option for your business by reading Invoice finance vs business loans.

how invoice finance works

Modern invoice financing works best when it is attached to a warehouse and logistics business’s online accounting system.

When a business’s bookkeeper issues an invoice, approximately 80% of the amount will be forwarded to the nominated account within around 24 hours by the invoice finance provider. Once the invoice is actually paid, the provider claims the same amount (plus a small amount of interest) and the business keeps what remains to cover overheads, tax, profits etc.

There is no need to involve clients in the invoice financing process; they simply pay the funds into a bank account nominated on their invoice.

Read What is invoice finance to know more.

reduce cashflow woes with invoice finance

During these tight times, everyone appreciates being paid on time.

When a business accesses invoice financing, it can ‘pay forward’ the favour by ensuring its own suppliers are paid on time. This prevents the issue of late fees and helps logistics and warehousing businesses to keep on moving.

The other benefit is being able to offer flexibility to debtors; if they are struggling and need longer payment terms a new agreement can be put in place, so the account doesn’t have to be cancelled.