How to Solve Your Cash Flow Problems with Invoice Financing

Author: Justin Reynolds | October 29, 2015

Though a vast majority of small business owners certainly understand how important access to liquid cash is, 60 percent of small businesses still regularly deal with cash flow problems.

Why is that?

Unfortunately, when it comes to managing their cash flow, there are many factors small business owners simply cannot control. Landlords might decide to increase rent. The price of raw materials and supplies might unexpectedly skyrocket overnight. Customers may hesitate to pay their bills on time due to an uncertain economy—not to mention cash flow problems of their own. And healthcare costs, well, that one goes without saying.

Even the most visionary small business owners can’t change that which is out of their control. So even if an owner has been masterfully managing his or her organization’s finances for quite some time, all it takes is one unforeseen obstacle or one unpredictable change to seriously cripple cash flow.

Managing a business is challenging enough. Managing a business that’s suffering from cash flow problems? It’s exceptionally harder, if not downright impossible.

According to the Small Business Administration (SBA), to avoid cash flow problems, companies would be wise to keep 3–6 months of cash on hand.

That amount, the SBA says, is enough to provide business owners with the peace of mind that comes with knowing they’ll be able to promptly pay their bills and keep their doors open for the foreseeable future.

Imagine having six months’ worth of cash in your business’ bank account?!

Unfortunately, stockpiling six months of cash is a whole lot easier said than done.

But there’s good news: Small business owners can reclaim control of their cash flow—and easily overcome any cash flow gaps they might anticipate—by making use of innovative alternative finance solutions.

Invoice Financing: Here’s How It Works

Small business owners can use invoice financing services to advance payments on any outstanding bills their customers have yet to settle. With a simple click of the mouse or tap of the finger, money is transferred directly to the business’ bank account.

Let’s backtrack a bit: Invoice financing services are incredibly easy to use.

First, you need to set up an account with the invoice financing service of your choice, which only takes a few minutes. (We think Fundbox is the best, but we may be a little biased.) You only need your name, email and phone number, and you also need to choose a password.

Doesn’t sound too hard, right?

Once you’ve got your account set up, you need to connect it with your accounting app (e.g., QuickBooks, Freshbooks, Harvest, Wave, Xero, etc). After that connection is established, you’ll see all your outstanding invoices in your account. Depending on how much money you need, you can select particular invoices to clear, and money is sent directly to your business’ bank account.

Crisis averted.

Fundbox, for example, gives you 12 weeks to repay the advance, plus a small fee. If you happen to pay the advance before the 12-week period is up, we waive the remainder of the fee. Curious as to how much that fee is? You can check out our transparent pricing model here for further information.

With a service like Fundbox at your disposal, you won’t have to worry about scraping together the cash to meet payroll, settle your bills or invest in your business’ growth. The money you’re owed is always within reach, and you won’t have to harass your customers about when you can expect a check.

Simply put, invoice financing services allow you to turn the page on your small business’ cash flow problems. And once that’s done, you can dictate the next chapters of your company’s history.

Ready for more?

Apply for funding and find out if you qualify today