Wholesale
Pay for stock at the right times and grow
Invoice Finance For Wholesalers
Cash flow is very important in the wholesale industry. Having to waiting 30-90 days to get paid by your clients can always impact your cash position. Having the cash available to pay for suppliers at the right times when prices are good is a very good position to be in for any wholesaler.
Invoice finance can often pay for itself in such industry as it can give a wholesale business the ability to pay for stock sooner and negotiate a discount that can sometimes be greater than the cost of an invoice finance facility itself.
Benefits of Invoice Finance in the Wholesale industry
Business growth
Invoice finance allows a wholesale business the ability to take on more stock if you have the room, as you no longer have to wait 30,60 or even 90 days to get paid by your clients .
Discounts from suppliers
If you can get paid on your sales invoices straight away, you can have the cash available to pay suppliers sooner. Suppliers will often give you a discount on stock if you can pay them sooner. This discount can often be greater than the cost of having an invoice finance facility.
Flexibility
Some wholesale businesses can be seasonal. Unlike a business loan, where you have to make payments back to a lender whether you are busy or not. Invoice finance allows you to fund your busy periods and not have to make payments back to a lender when you are quiet.
Win more work
With an invoice finance facility, you now have the ability to offer extended payment terms of up to 120 days. This could be the difference of a big retailer using you wholesale services or not.
Export
Invoice finance lenders can deal with clients that are also based overseas as long as they are a creditworthy client.
Increase stock levels
Invoice finance can free up the cash tied up in outstanding sales invoices and allow you to purchase more stock
How does Invoice Finance work for a Wholesale business?
Send your invoices
Receive up to 90% of the invoice value
Your business uses the money
Your client pays
You receive the remaining 10%
How do I get an Invoice Finance facility?
Simply speak to us at Contact Business Finance and we can help tailor the most suitable invoice finance facility for your business. With our knowledge in the world of Invoice Finance, we put you in contact with the most suitable lender that understands the highs and lows of the wholesale industry.
We will compare the market for you at no cost, make you feel comfortable with the facility and then introduce you to a lender that is the best fit for you and your wholesale business.
And it’s not just Invoice Finance we can help with – we can look at business loans, asset finance, property finance and much more. We often help wholesale businesses purchase property as they expand their business.
Frequently Asked Questions
Invoice Finance or a Business Loan for my Wholesale business?
Invoice finance allows you to release cash in peak seasons from your sales invoices. Unlike a business loan where you would need to pay back interest whether you are busy or not.
How can Invoice Finance help me grow my Wholesale business?
Invoice finance helps wholesale business grow by releasing cash from unpaid sales invoices. This allows a wholesaler to improve cashflow and have cash available at key times to purchase stock. Purchasing stock at the right times allows you make more profit but also paying suppliers sooner can also help you negotiate a discount.
Do my customers need to be other businesses?
Yes, invoice finance lender only lend money against invoices you raise to other businesses. If your business is selling directly to the consumer, invoice finance would not be suitable for you.
Do I need to have a minimum turnover for an Invoice Finance facility?
Most invoice finance providers work of a minimum forecasted turnover of £100,000 per year. Higher level of turnover is often required with the banks.
Will my clients know I’m using Invoice Finance and could that affect relationships?
Invoice finance is very common in the wholesale industry. Even some of the larger wholesalers around the world use invoice finance. Invoice finance can be confidential, so our clients do not need to know that your business uses such a facility. It depends on the type of facility you have. If you have a standard invoice factoring facility, the lender’s bank details are disclosed at the bottom of your invoices and the lender will also assist with credit control. However, if you decide to get a confidential facility – the bank details at the bottom of the invoices will be in a trust account named after your business and credit control stays with you.
Does it matter how long my payment terms are with my client?
Yes, ideally you don’t want to be offering longer than 90 day terms to your client. However, most invoice finance lenders will fund your invoice for 90 days end of month, meaning that your clients can be on 90 day date of invoice terms and your chosen lender will still fund them. Some lenders can even fund invoices for 120 days end of month.
Do I have to include all invoices?
No, you might have some clients that pay you straight away. You have the ability to select which clients you require funding against.
Can I insure my invoices?
Most invoice finance lenders also offer credit protection. This can avoid the chance of a bad debt and give you peace of mind if a client goes through any form of insolvency.
How quickly can I get an Invoice Finance facility?
Invoice finance can be arranged within days. However, we would always recommend giving a lender 2/3 weeks notice as sometimes speed of an application can out of their control. Please get in touch with us today to find out more information.