Is Invoice Financing a Good Idea for Small Businesses?

June 8, 2022

For businesses to operate successfully and continue to scale, they need a steady cash flow. But even if a business is selling its services or products and has a good base of clients, actually receiving the money for these services can take longer than it should. Invoice financing can act as a solution.

What is Invoice Financing?

Invoice financing, sometimes called receivables financing, allows businesses of all sizes to receive fast payouts on their invoices instead of needing to wait a certain period of time. After submitting an invoice to an invoice factoring business (like BP Financing), business owners can receive their invoice funds in as little as a day.

Because businesses, and small businesses especially, rely on timely payments from clients and customers to continue operating, pay their bills, and grow, invoice financing is a solution that many business owners turn to.

Invoice Financing versus Invoice Factoring

While you might see the terms “invoice financing” and “invoice factoring” used in place of one another, the two are different things. Although invoice factoring often involves passing on your invoices to a company to receive the payout, invoice financing allows a business to borrow against unpaid invoices.

This means you can choose which invoices you’d like paid with the understanding that you’ll pay back the amount in a specified time frame. Though, it’s important to understand that invoice factoring is technically a type of invoice financing, and that the benefits of the two are closely related.

Benefits of Invoice Financing

If you have trouble with slow invoice processing and you need funds more quickly, the convenience and ease of invoice financing can offer several valuable benefits to your business. Keep reading to learn if invoice financing may be helpful for your small business.

Immediate Access to Cash and Funds

Above all else, your business benefits from invoice financing because it provides immediate access to cash. Instead of waiting for months at a time to be paid by your clients, you can expedite the process by establishing a partnership with an invoice factoring company and receive the funds your business needs — when it needs it.

With BP Financing, you can receive your invoice payment within 24 hours so that you can fulfill your financial obligations or reinvest in your business without needing to wait for payment. As you can imagine, invoice financing is extremely helpful for keeping your business running smoothly. And it enables your business to grow!

From new equipment or tools to marketing campaigns — invoice financing helps you continuously improve your business at a faster pace than waiting for the traditional time period for invoice payouts.

Can Secure Loans without Extending Credit Lines

While small business loans can help businesses grow, the process for applying for a loan can be drawn out and affect a business's credit history. Not to mention that you often already need a good credit score to secure a loan in the first place.

However, with invoice financing, you don’t need to be approved based on your credit, you won’t have long-term debt show up on your credit history, nor will you need to worry about interest fees.

Our invoice factoring services at BP Financing allow you to take full advantage of the money that’s owed to you without taking on new debts or interest.

Scale Your Business with Invoice Financing Services from BP Financing

Time is money, so not receiving payment for your invoices now could be costing your business in the future. If you’re ready to streamline your cash flow and receive payments for your invoices when you need them the most, reach out to us at BP Financing today.