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Would you like to borrow against a single invoice?

Close-up picture of an invoice

In August 2013, the UK Government became a Buyer of invoices on the MarketInvoice Platform, investing directly in UK SMEs looking to access working capital and grow their businesses.

Why is the Government investing funds through MarketInvoice?

The UK Government, via the Department of Business Innovation and Skills (‘BIS’) and as part of the ‘Business Finance Partnership’, has committed to using alternative finance providers to channel much needed growth funding to UK SMEs.  The scheme is investing £1.2 billion into increasing lending to small and medium sized businesses from sources other than banks.

How does it work?

Any company can use MarketInvoice provided its sells goods or services to other large businesses.

Its a ‘pay as you go’ service and you can see the estimated costs by using their calculator

Companies are vetted and the invoice must be to a large corporate not to other SME’s.

Its confidential so your customer will not know you have used MarketInvoice, if the customer doesn’t pay you will have to refund the investor.

So far £163m of invoices have been funded by MarketInvoice.

Of course it would be better if customers always paid quickly!

Would your Suppliers like to be paid faster?


Yes of course they would, silly question, everyone wants to be paid faster but how can it be done?

Santander may have the answer, they are offering a facility to SME’s called Supplier Payments and its part of the Funding for Lending Scheme.

Supply Chain Finance has been around for a while, this an extract from an article in the Telegraph in October 2012

Supply-chain finance, which is sometimes known as “reverse factoring”, allows big businesses to notify a bank as soon as a supplier’s invoice has been approved. The bank, armed with the assurance the bill will be paid, will then extend a full, immediate advance of the bill to the supplier at a low interest rate.

The Prime Minister hailed the technique as “win-win” because large companies get greater protection from small suppliers going bust, while the small business avoids having to wait for payment and, since the invoice is approved, avoids any risk of non-payment.

Most of the main banks have solutions for large businesses but it isn’t normally available to SME’s.

Is this an option for your suppliers?


The Cash Cycle – What is it? what is your Cycle? How can you improve it?

Fotolia_45741373_XS cash

As the saying goes, Sales are Vanity, Profit is Sanity and Cash is King. The Cash Cycle also known as the Working Capital Cycle helps you to quickly understand how much cash you need to run your business.

Here is a great example from Steve Grice for an average business

Average time to collect payment from customers 60 days Add
Average days sales held in stock 25 days Add
Average days taken to pay suppliers 35 days Subtract
Cash cycle 50 days

Here is a brilliant Cash Flow Improvement Tool from NAB

This model quickly and easily calculates your cash cycle but also shows the effect of making improvements.

Having discovered what the cashflow cycle is, what can you do to improve it? well that depends, assuming you have agreed the best possible terms with your suppliers, you need to find ways to speed up cash received from Customers, if your business Sells to other businesses the first thing to look at is Credit Management.

CIMA have produce a comprehensive guide

But Credit Management may not be enough on its own, perhaps Invoice Finance might help?

Invoice discounting is an excellent, cost-effective way for certain businesses to improve their cashflow position.

  • Invoice discounting is most suitable for businesses with good financial controls in place and a strong financial background.
  • Invoice Discounting is ideal if you have an annual turnover above £500,000
  • Invoice discounting is suitable for business with an established credit control department.
  • Invoice Discounting is suitable for a wide range of businesses including manufacturers, wholesalers, transport firms, employment agencies and providers of some business services.
  • Suitable businesses for invoice discounting are growing businesses because the level of funding grows in line with increasing sales.

If your business sells to end customers you might consider Card Processing Advances.

You must be masterful. Managing cash flow is a skill and only a firm grip on the cash conversion process will yield

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