Invoice Finance & Business Loans

What is Cashflow?

At its simplest, cashflow is – as the term suggests – the amount of cash being transferred in and out of a business on a daily, weekly, and monthly basis. What is Positive Cashflow? If cashflow is positive, it means that cash is coming into the business more quickly that it is going out. This means that more can be added to a company’s reserves which in turn will allow it to reinvest into moving the business forward, cover regular costs and future debts, or to pay profits to shareholders.

What is Negative Cashflow?

If cashflow is negative it indicates there is a shortfall in the amount of money held by the company which may impact its ability to operate or move forwards with its plans. Negative Cashflow means that a business is having to pay out cash quicker than it is receiving it in. Quite often this is due to short/ no credit period with their suppliers (creditors) and lengthy credit periods from their customers (debtors). As a result of the above very profitable businesses can still have negative cashflow. Also, negative cashflow is quite common among businesses that are experiencing rapid growth. Negative cashflow can be resolved by borrowing facilities, such as an unsecured loan or funding against the assets which the company owns (including unpaid invoices/ debtor book/ stock). At Clarity Commercial Finance we would love to discuss the specific cashflow requirements of your business. Please find below a brief overview of the cashflow solutions that we have available.

Unsecured Business Loan

As the name suggests these are not secured against an asset and term vary from 12 – 72 months. The loan, for a fixed amount, is then spread over this period with an element of interest added. Unsecured business loans are usually accompanied with director’s personal guarantees.

Merchant Cash Advances

Merchant Cash Advances are unsecured finance facilities which enable businesses to draw down an agreed loan amount against future takings from their PDQ card machine. This enables repayments to marry up with the cashflow coming into the business as the repayments are a small percentage of the future debit and credit card payments.

Invoice Finance

Invoice financing is a way for businesses to borrow money against the amounts due from their customers (debtors). Typically, customers can expect to have access to up to 90% of their invoice, which will be available to draw down against upon approval from the funder (usually within 24 hours). Invoice financing can help businesses improve cash flow, pay employees and suppliers, and reinvest in operations and growth earlier than they could if they had to wait until their customers paid their balances in full. Invoice financing can solve problems associated with customers taking a long time to pay and can assist businesses that require cashflow assistance to take on new contracts to expand their business. Businesses pay a percentage of the invoice amount to the lender as a fee for borrowing the funds. Invoice Finance can also be used for other purposes including management buy outs, acquisitions, and debt restructuring.

We offer different types of Invoice Finance including:

Confidential Invoice Discounting – confidential facility where the business debtors are unaware that invoices are being financed. The funder lends against the total debtor book and so the ability to produce regular management accounts is usually a requirement.

Factoring – disclosed facility where the lender may also assist with collection of overdue payments from business debtors. The funder has a mirror ledger where they lend against each individual invoice.

Spot Discounting/ Selective Invoice Finance – funding against a specific invoice as opposed to an ongoing agreement.

Our Process

Application
Firstly, we like to meet the client and truly understand their intrinsic needs, cashflow requirements and future buying plans.

Credit Assessment
We then evaluate the financial information provided, along with the client’s specific requirements and we will assess which of the 80+ Funders that we have on our panel, would be most suitable. We will then put together a bespoke financial solution to achieve the client’s goals.

Approval
Once finance is approved, we carry out all the work dealing with suppliers and arranging the necessary paperwork to be signed with the client at your convenience.

Let's start a conversation

We’d love to understand how we can help achieve your personal and business goals.