To make things easier for you as a business owner, we have gathered some tips from our financial adviser Henrik Windahl, who has helped hundreds of businesses achieve stable financing solutions:
What should business owners consider regarding their financing?
– The first question you should always ask yourself is what the investment for which the financing is intended will return to the company. Regardless of whether it is a matter of working capital, leasing or other financing, the calculation for the financing must generate value in return.
How much do you need to know about finance as an entrepreneur?
– It is obviously good to know as much as possible about financing, but even more important to keep track of one's core business. Finding a partner instead, such as Invoier, which develops the best financing solution for you, gives the entrepreneur time to focus on their very core business and thereby also increase revenue.
What is a common mistake that a business owner can make regarding their financing?
– Taking on costs that the company cannot bear. The advantage of invoice financing is that you are financing actual work and revenue that is on its way into the till, while still freeing up money to reinvest in the business faster than if you had waited for payment from your customers.
How do you know if factoring is right for your business?
– That depends on the need. If you have a high demand for your service or product and what is limiting further sales is capital, then factoring is a super good tool to finance growth and thereby release liquidity from your accounts receivable.
In most cases, you can get multi-fold financed capital via factoring instead of loans based on your history or the collateral you provide to the bank.
What is important to consider when choosing a factoring provider?
– Obviously price, but also how high limits the factoring provider can offer and whether they advance against or buy the invoices. In the latter case, the provider also assumes the credit risk, which can have a major impact. With advances, the risk is assessed on you, whereas when buying the invoices, the risk is assessed on your customers instead. Also, watch out for signing long-term agreements! Choose a provider that does not require lock-in periods or a certain volume of sold invoices, so that you get stuck with costs you wouldn't have had to incur.
Would you like to know more about the type of financing that could suit your business? Check out Invoier financial solutions or book free financial business advice with Henrik below!