Coronavirus see increase in applications for invoice finance

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The coronavirus epidemic has challenged thousands of small businesses, start-ups and enterprises across the UK and many are looking for an injection of finance to help fill their short fall of cash.

For many businesses that operate storefronts and practices and those working in events, travel and hospitality, their businesses are pretty much on hold until further notice and this means a real shortage of income coming in.

The coronavirus period has seen thousands of companies waiting for invoice payments

The role of invoice finance plays an important part in helping small and growing businesses to release any money that is tied up in unpaid invoices. Otherwise known as invoice factoring or asset-backed finance, it has gained huge momentum in recent years and is particularly popular in catering, construction and fashion industries.

More recently, the coronavirus period has seen thousands of companies waiting for invoice payments or they are delayed until further notice. The result has seen a huge surge in enquiries for invoice finance across the UK.

This comes at an important time where a lot of banks and high street lenders are restricting lenders across mortgages, personal loans and short term loan lenders.

A spokesman for Funding Invoice commented:

“These are very unpredictable times for UK businesses, with many being put on halt until further notice. However, a lot of people have strong contracts and these provide the basis of strong collateral in order to borrow. Within these contracts, they know that they will get paid when work continues and they can use invoice finance to borrow up to 80% of that invoice value to pay for things like staff, overheads and even basic living costs.”

“It is accepted that some of the vendors they are working with may not be able to fulfil their financial obligations, but for businesses that have invoices outstanding with the very large and strong companies (e.g banks, UK supermarkets) there is every reason that they will be paid on time.”

“People still have to pay their staff costs, business rates and other overheads, and we are delighted that Funding Invoice can provide help to businesses of all sizes.”