{"id":6589,"date":"2020-11-12T04:40:28","date_gmt":"2020-11-12T04:40:28","guid":{"rendered":"https:\/\/kredx.com\/blog\/?p=6589"},"modified":"2023-12-27T05:37:26","modified_gmt":"2023-12-27T05:37:26","slug":"invoice-financing-a-quick-solution-to-all-your-business-credit-needs","status":"publish","type":"post","link":"https:\/\/www.kredx.com\/blog\/invoice-financing-a-quick-solution-to-all-your-business-credit-needs\/","title":{"rendered":"Invoice Financing &#8211; A Quick Solution To All Your Business Credit Needs"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The Indian Government and financial experts have together touted the MSME sector to be the torchbearer of India\u2019s economic prosperity. However, financial support from the formal banking sector to MSMEs, remains low at only around 16%, according to an IFC-Intellecap report. The report revealed, there was an Rs. 16.66 lakh crore credit gap in the MSME sector, as of June 2019, which has only widened over the recent economic crisis.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Thus, to avert a cash flow slows down and sustain themselves better amid the fierce competition, several companies have turned to <\/span><a href=\"https:\/\/www.kredx.com\/supply-chain-finance\/invoice-discounting\/invoice-financing\">invoice financing<\/a><span style=\"font-weight: 400;\">. This credit option bridges the demand gap to a certain extent, especially for micro and small enterprises.\u00a0<\/span><\/p>\n<h2><b>Importance Of Invoice Financing In A Business<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Cash flow issues are a major cause of why several enterprises, especially small-scale ones, struggle to grow or even survive the competition. Matters get worse, when most of your customers defer payments, sometimes as long as 90 days.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Such a long duration is bound to overstrain your company\u2019s liquidity, tying your hands from undertaking new projects or addressing necessary expenditures; although you have bills approved by customers.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Through bill financing, you can leverage your company\u2019s <\/span><i><span style=\"font-weight: 400;\">Accounts Receivables<\/span><\/i><span style=\"font-weight: 400;\"> to borrow funds. This way, you can avoid any liquidity crunch caused due to prolonged credit periods of 30 \u2013 90 days.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Technically, bill financing allows you to release future cash inflow, which can be a significant benefit when it comes to <a href=\"https:\/\/www.kredx.com\/supply-chain-finance\/working-capital\/\">working capital management<\/a>.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are several other benefits of this financing option that can help resolve your business\u2019s cash flow issues.\u00a0<\/span><\/p>\n<h2><b>Advantages Of Invoice Financing<\/b><\/h2>\n<ul>\n<li>\n<h3><b>Fast Availability<\/b><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Acquiring funds on time can make a world of difference in any business. Suppose you have received a massive order from a client, but you have been given only a week\u2019s deadline to deliver.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Now, you will need to employ excess resources to its realisation, which will require a substantial influx of cash. In that regard, leading integrated cash flow solutions providers like KredX can help meet the <\/span><b>invoice financing gap<\/b><span style=\"font-weight: 400;\">, by providing an advance within 24 \u2013 72 hours*, letting you start operations promptly.<\/span><\/p>\n<ul>\n<li>\n<h3><b>High-Value Loan<\/b><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Another crucial advantage of invoice financing is you can get a considerable percentage of your company\u2019s trade receivables as a loan. What\u2019s more? The loan amount does not entail any usage restriction for starters.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You can use the loan to meet a host of business expenses, from operational overheads to salaries to replenishing inventory. The flexibility in usage and their high value will boost working capital management considerably.\u00a0<\/span><\/p>\n<ul>\n<li>\n<h3><b>\u00a0Simple Process<\/b><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The simple loan disbursal process is one of the reasons why invoice financing is an ideal solution for a growing enterprise\u2019s credit needs. All you need to do is register with a <a href=\"https:\/\/www.kredx.com\/bill-discounting\/\">bill discounting platform<\/a>, upload your company\u2019s approved invoices, and receive funds in your account, all within 1 \u2013 3 days.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The hassle-free, digitalised process offered by financiers like KredX makes it possible to turn to invoice financing for your company\u2019s working capital needs, time and again.\u00a0<\/span><\/p>\n<ul>\n<li>\n<h3><b>No-Collateral<\/b><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">You do not need to pledge any asset to acquire funds with <\/span>invoice financing<span style=\"font-weight: 400;\">. It\u2019s sanctioned simply against the value of your enterprise\u2019s accounts receivables. Thus, leaves behind no risk of asset liquidation.<\/span><\/p>\n<ul>\n<li>\n<h3><b>Simple Repayment<\/b><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Unlike traditional working capital loans, you do not need to pay EMIs regularly towards servicing a credit of this sort. You can simply forward the outstanding amount to the financier on the maturity date of such accounts receivables. It reduces the burden of a loan considerably, allowing more monetary flexibility.\u00a0<\/span><\/p>\n<ul>\n<li>\n<h3><b>Choice Of Credit Control<\/b><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Invoice financing is a broader term comprising \u2013 bill discounting and factoring.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Now, with the former option, you retain credit control of your business. Thus, you stay in the authority of collecting repayments, and your customers don\u2019t get to know that their invoices have been utilised to acquire funds.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The financier assumes the responsibility to collect repayment if you opt for invoice factoring. A downside of this facility is that such an arrangement does not always bode well with clients.\u00a0<\/span><\/p>\n<h3><b>Bottom Line<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Availing credit from banks and NBFCs can often become challenging, owing to factors like stringent eligibility criteria, lengthy documentation, and processing periods. You can turn to <\/span>invoice financing<span style=\"font-weight: 400;\"> for bypassing such challenges, and ensure that your company\u2019s working capital needs are adequately met. <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Indian Government and financial experts have together touted the MSME sector to be the torchbearer of India\u2019s economic prosperity. However, financial support from the formal banking sector to MSMEs, remains low at only around 16%, according to an IFC-Intellecap report. The report revealed, there was an Rs. 16.66 lakh crore credit gap in the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":6592,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35,65],"tags":[180,72,39,125,37,50,75,436,401,38],"class_list":["post-6589","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-invoice-discounting","tag-alternative-financing-options","tag-bill-discounting","tag-business","tag-cash-flow-solutions","tag-invoice-discounting","tag-invoice-financing","tag-invoice-factoring","tag-msme","tag-nbfcs","tag-working-capital"],"_links":{"self":[{"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/posts\/6589","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/comments?post=6589"}],"version-history":[{"count":3,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/posts\/6589\/revisions"}],"predecessor-version":[{"id":18428,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/posts\/6589\/revisions\/18428"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/media\/6592"}],"wp:attachment":[{"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/media?parent=6589"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/categories?post=6589"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/tags?post=6589"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}