Whilst much of the recent debate on access to finance to small to medium sized enterprises (SMEs) has focused on traditional bank loans or equity investments, there are other forms of funding which should also be considered as an alternative source of money for firms in Wales. One solution that is being increasingly used by companies to deal with late payment whilst improving cashflow is that of invoice finance. This is where a finance provider pays an agreed proportion (usually 80-85 per cent) of approved invoices to the company on receipt of a copy of the invoice. The balance (less a small charge) is paid upon client payment. With the economy growing, there has been a surge in demand for working capital in the SME sector that has created opportunities for more invoice financing. Despite this, its current use is relatively low compared to more traditional sources of lending and only 43,000 SMEs out of a total of nearly 5 million in the UK are currently utilising invoice fi...
Entrepreneurship, innovation and the economy