Invoice Finance: How to Use It to Fund Your Startup
Starting a new business is an exciting venture but often comes with financial challenges. One of the biggest hurdles for startups is managing cash flow and ensuring that there is enough working capital to cover expenses and fuel growth. This is where invoice finance can be a game-changer. In this article, we will explore what invoice finance is and how you can leverage invoice financing companies it to fund your startup. Understanding Invoice Finance Invoice finance, also known as accounts receivable financing, is a financing option that allows businesses to access funds tied up in their unpaid invoices. Instead of waiting for customers to pay their invoices, startups can sell them to a third-party finance provider, a factor or a lender. The factor will advance a percentage of the invoice value, typically around 80-90%, to the business upfront, providing them with immediate cash flow. Once the customer pays the invoice, the factor will release the remaining balance, mi...