6 myths about INVOICE FINANCE debunked!
Misconceptions about invoice finance—such as it being costly or only suitable for businesses in trouble—can hold you back from exploring one of the most flexible funding solutions available. Let’s separate fact from fiction and uncover the truth about how invoice finance can empower your business.
Myth 1: “Invoice finance is only for businesses in financial trouble”
Reality: Invoice finance is a versatile tool for growth, not just a rescue measure.
Example: A manufacturing business experiencing rapid growth secures invoice finance to cover raw material costs while waiting for payment from a large retailer. This allows them to take on bigger contracts without worrying about cash flow constraints.
Myth 2: “It’s too expensive to be worth it”
Reality: While there are costs, the benefits often outweigh them by free up cash flow and avoiding missed opportunities.
Example: A landscaping company uses invoice finance to pay suppliers on time and secure early payment discounts, effectively offsetting the costs of financing and even saving money.
Myth 3: “Invoice finance is only for large businesses”
Reality: Invoice finance can be tailored for businesses of any size, from sole traders to mid-sized enterprises.
Example: A small catering business leverages invoice finance to fund day-to-day operations during wedding season, ensuring they can handle deposits and manage large event bookings simultaneously.
Myth 4: “Invoice finance will disrupt my relationships with customers”
Reality: While Nova’s facility is fully disclosed, we take a highly professional and discreet approach to minimise any impact on your customer relationships. Invoice verifications are conducted via email with precision and efficiency, ensuring minimal interaction and no unnecessary interference with your client communication.
Example: A construction company leveraged Nova’s invoice finance to unlock working capital. Nova’s discreet and streamlined verification process ensured that customer relationships remained intact, allowing the business to maintain its professional reputation while improving cash flow without disruption.
Myth 5: “It’s only for businesses with perfect credit”
Reality: Invoice finance focuses on the creditworthiness of your customers, rather than that of your own business
Example: A wholesale distributor with a less-than-perfect credit score accesses funding based on invoices from their long-standing, creditworthy clients. This allows them to restock inventory without delay.
Myth 6: “Invoice finance locks you into rigid, long-term contracts”
Reality: Nova offers flexible invoice financing with terms typically between 6 to 24 months, designed to suit your business's changing needs. This flexibility allows you to access cash flow when required, without the pressure of long-term commitments.
Example: A growing retail business used Nova’s invoice finance to manage seasonal demand. They secured a 12-month facility, ensuring steady cash flow during peak periods, while having the freedom to adjust as needed.
