Have you heard of invoice financing? If you’re a freelance writer, you know how difficult it is to manage your cash flow. Perhaps you left a full-time job to go out on your own, leaving behind a steady paycheck and benefits. Or, maybe you’re trying to build your writing business on the side so that you can eventually become a full-time freelancer.
Regardless of your particular situation, you’re likely getting used to sending invoices to your clients and then waiting to get paid—sometimes for up to three months. Although you may work from home with no employees to worry about, you still have to pay your mortgage or rent, buy groceries, and cover a myriad of other costs. You may also have business overhead such as marketing fees, an accountant to pay, office supplies to purchase, and other expenses. Mounting bills coupled with unsteady cash flow is enough to make many freelance writers give up their newfound independence and go back to a full-time job.
However, there is a way to solve your cash flow dilemma: Invoice financing.
What is invoice financing?
Invoice financing is a type of funding whereby you receive advances for your unpaid invoices. That’s right. If you are tired of waiting for 30, 60, or 90 days to get paid by the publications and companies you write for, invoice financing may be a perfect solution for your freelance business. It’s different than a conventional loan in that you don’t borrow a specific amount of money that you then have to pay back plus interest. Instead, you can use invoice financing to advance you the funds to cover the exact amounts of specific invoices. For example, if you know one of your clients always takes at least 60 days to pay you, you can request advances on just the invoices that you have sent to this one client.
Invoice financing also gives you access to your much-needed cash fast—typically by the next business day. This way, you can pay your bills and better manage your cash flow.
How do I start using invoice financing?
If invoice financing sounds like a good solution for you, your next question may be: How do I tap into this for my freelance business and start getting paid for my outstanding invoices?
You’ll be glad to know that some companies, like Fundbox, make it simple for you to start right now. Here’s how it works in three simple steps:
Set up a Fundbox account.
You can sign up online by entering your email address, selecting a password, and designating your bookkeeping app.
Begin clearing your invoices.
Simply click on any of your outstanding invoices, and the amount will be sent to your bank account as quickly as the next day. You then pay back Fundbox for the total invoice value, plus a flat You can choose to make weekly payments stretched out over 12 or 24 weeks.
For a $1,000 invoice, for example, your weekly payment would be about $89 a week if you choose to repay over 12 weeks ($83 for the invoice value, and roughly $6 in fees.) If you’d prefer to repay over 24 weeks, your payments will be about $48 a week ($42 of invoice value plus about $6 in fees). Fees may vary, but you’ll always have access to your fee and weekly payment in the Fundbox dashboard before you clear any invoices.
Another big perk: If you have the available funds to pay back those invoice advances early, you can do this without penalties. For example, if you pay back an invoice in full on week 6 instead of making all 12 payments, you’ll only pay fees for weeks 1–6. The fees for weeks 7–12 will be waived completely.
Live your life. Grow your freelance business.
Now that you can rely on a steady cash flow, you can pay your bills, invest in marketing your writing services, and enjoy your freelance career.
A final note: Most freelance writers dread sending emails or making phone calls to clients to ask for payment. With invoice financing, these collection calls may be a thing of the past as you won’t have to worry about waiting to get paid. In most cases, the check will roll in eventually. Meanwhile, you can relax knowing that you already have the funds to cover those invoices in your bank account.
