Your Business

Getting through the tough times with invoice finance

Team Waddle  •  19 January, 2022

Business disruptions have gone from unexpected to inevitable thanks to COVID-19. Having a backup plan should now be a given, rather than a luxury. Do you have a safety net for when the going gets tough? We'll show you how invoice finance can help get your business through the tough times so you can make the most of the good times.

What is invoice financing?

Invoice financing is a type of business finance that allows you to access funds owed to you by your customers in outstanding invoices. Unlike a traditional business loan, where you’re given a lump sum which you then pay interest on, invoice financing (specifically invoice discounting) acts as a flexible line-of-credit, meaning that you have access to funds when needed, without paying interest on them when you don’t.

Other business credit products, like an unsecured business loan, have the potential to send you into an uncontrollable debt spiral with the regular repayments that must be made. With invoice finance, your line of credit is repaid as your customers pay their invoices. So you don't need to worry about keeping on top of regular repayments.

How invoice finance improves your cash flow

Having healthy cash flow is one of the most crucial elements in keeping up the momentum of business success. Unfortunately, today’s small businesses face many obstacles when it comes to cash flow, which is why unlocking the money tied up in your outstanding invoices can free up funds and allow you to carry on doing what you do best without being held back by lack of capital.

Long payment cycles in many industries create pain points no matter what size of business you’re operating. Fluctuating or seasonal sales, day-to-day costs, COVID lockdowns, payroll or new equipment purchases can’t wait the 30, 60 or even 90 days it takes your customers to pay their invoices. Waddle's invoice finance might be the right solution to smooth your cash flow and keep you moving.

If you have delivered a product or service, issued invoices, and are now waiting to be paid, Waddle provides access to up to 80% of your outstanding invoice amount, in as little as 48 hours. When your customers settle their invoices, the loan is repaid. The more invoices you raise in your accounting software, the more available funds you’ll have at your fingertips!

Alternative forms of business finance such as business term loans often aren't appropriate for helping your small business cover your variable running costs. Here's how accessing cash from your outstanding invoices can benefit your business:

Keep valuable customers on your books

If you've got loyal customers who insist on long payment terms, it can feel like an eternity waiting for them to pay their invoices. Particularly if you’re reliant on those funds to cover other business costs. Invoice finance allows you to keep working with your most valued customers by providing ongoing access to the money from their outstanding invoices when you need it.

Pay suppliers using business cash flow

Being able to pay your suppliers can feel like a 'chicken and the egg' dilemma; you can't keep providing your product or service without supplies, but you can't pay for supplies without money from invoices! Avoid late payment fees from suppliers, and keep your business moving by paying your supplier's account using funds from your unpaid invoices.

Repair or replace equipment quickly

Having your equipment break down is a part of business life, but some lenders may make you jump through several hoops to finance new equipment without the guarantee you'll be funded. Thankfully, invoice financing allows you to quickly and easily access the capital required to help get your gear running again without costing you excessive time or money.

Take advantage of growth opportunities

We can't always predict the tough times, nor can we predict when growth opportunities pop up. If an opportunity arises for you to take your business to the next level, but it requires an investment in operations, new staff or even additional overheads, you don't need to let lack of capital hold you back. Invoice financing can give you a competitive advantage over other businesses by acting as a cash reserve sitting in your account, ready to use for the good times, not just helping you through the bad.

What do I need to apply for invoice financing?

To be eligible for Waddle Invoice Finance, you must typically meet the following criteria:

  • You invoice other Australian businesses.
  • You have been trading for more than 6 months.
  • You invoice only when work is complete.
  • You have at least $10,000 in one or more outstanding invoices.

Frequently asked questions about invoice finance

Waddle answers some of the most frequently asked questions about Invoice Finance services.

How quickly can I get funding?

Provided you have supplied all of the required information, we can get the funds to you within 48 hours. Once your facility is set up, your available credit limit can be accessed in just a few clicks of your mouse.

How much can I be approved for?

Your credit limit is determined by the total invoice value of your eligible accounts receivable ledger, as well as the level of funding required. Your business and personal objectives are important, so Waddle’s credit team will be in touch to discuss the appropriate level of credit during the assessment and approval stage (lending and credit criteria apply).

Eligible invoices are:

  • Raised after providing a good or service.
  • Aged no more than 90 days from issue date.
  • Invoiced to other Australian businesses (B2B).
  • Not staged or progressive invoices.

Why do I need to connect my accounting package?

By connecting to your accounting software package, Waddle removes the need for you to upload invoices and ensures that your credit limit updates in real-time. Wave goodbye to unnecessary administration and hello to more working capital!

Don't let other lenders make tough times harder by leading you into unnecessary debt - contact Waddle today so we can paint an accurate picture of how invoice finance can help you through tough times.

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