As a business owner, you know how hard it can be to keep up with cash flow. When you have a business where you allow customers a 30-60 day window for invoice payments, trying to make ends meet in between can prove to be a daunting task. You have business expenses, payroll costs, and production expenses to take care of and you can’t put your business on hold until people can pay. You certainly can’t ask your clients to pay their invoices early. That’s not only unprofessional, but it also makes you look desperate.

This is a complicated business situation that many companies find themselves in. Trying to build a business is never easy, but it is something that can be done. One of the most useful solutions is to find a bridging loan that can cover that gap during the period when you need funds and are waiting for invoices to be paid. The most common type of loan is known as invoice finance. This allows you to borrow money against your unpaid invoices, and then repay the money once the invoices are paid. You still get your profits, or what is left of them, after your loan and the fees are taken out.

Most people automatically think of business loans when they need working capital and expense funds, but these aren’t always the best solution. Invoice finance takes over when banks won’t help companies or when people are too unsure of the nature of the banking industry and want another option. These loans can be for any amount, and can be up to 85% of the outstanding invoice total, depending on the company that you are working with. Of course, as with any loan, you should only ever borrow the amount of money that you need so that you don’t create a bigger financial hole for your business.

Most companies will do invoice finance loans as a transaction, where they buy 80-85% of the invoices immediately after invoices are sent to clients. Then, they withhold the remaining amount in order to cover underpayments and other discrepancies. Once everything is squared up and invoices are paid, you will get the rest of the funds, minus the discount or fees that you pay for the lending service. Invoice financing is a very simple process that can save any business a lot of time and stress when it comes to finding ways to fund the business.