2022: The rise and evolution of Invoice Finance to support business growth

2022 is set to be a transformative year for business with innovation, recovery and prosperity at the forefront. We don’t expect the next 12 months to be without challenges, but we anticipate that Invoice Finance’s continued growth and evolution will only serve to support the growth of the business. Looking to the year ahead, Phil Chesham predicts what business owners will be looking for over the next 12 months and how essential Invoice Finance will be to support that.

A new year means new opportunities

As the dust settles on 2021 and we begin a new year, many companies will see this as a chance to review, reset and reinvest. New opportunities come in all shapes and sizes, whether to innovate existing offerings, enter new markets, invest or expand. We know very well that with any new business comes strategic planning, cash flow forecasting and budgeting – because while seizing new opportunities can lead to winning new business, it can also lead to increased costs. The benefit of Invoice Finance is not only its ability to free up additional working capital to fuel these opportunities, but it naturally complements growth with lines of finance that grow as the business grows. Invoice Finance providers regularly review these lines of finance to ensure that the facility provided is not only suitable for their client’s current situation, but also for their future ambitions.

Invoice Finance – a favorable choice in the face of rising interest rates

The news of an interest rate hike in December was undoubtedly worrying for those who have relied on short-term bank financing to bolster their finances. With interest rates likely to rise again throughout 2022, this creates a situation for many where the interest repaid is greater than the loan or line of finance itself. Changes of this nature further amplify the importance of preparing cash flow forecasts and the need to build flexibility to deal with contingencies such as rising cost of borrowing. The good news is that there are plenty of affordable financing options out there, and Invoice Finance is one that typically charges lower interest rates than banks. So, with further interest rate hikes looming, the focus on researching available financing options and comparing costs will undoubtedly be at the forefront of business owners’ minds this year. Invoice Finance will undoubtedly have an important role to play here by providing additional flexibility and peace of mind.

Zombie companies will stop walking among us

Over the past 18 months, thousands of businesses have been helped by government support initiatives. So much so that Insolvency Service statistics for the fourth quarter showed the total number of business insolvencies fell to its lowest annual level in 2020 since 1989. While the latest round of support measures is coming to an end and refunds are now due, the so-called “who continue to walk among us but are bound to fold, will no longer be supported by this additional support. This will also be a difficult time for viable businesses, and it is therefore essential to recognize which companies have a strong future ahead of them.Invoice financing providers are in an ideal position to offer support and play a vital role in ensuring that these viable companies succeed in standing out and thriving. relationship-driven approach means we step away from algorithms and truly understand the story behind a business and can support deny its ability to make it a success.

Sustainable investing will take center stage in 2022

Our impact on the environment has been in the headlines after COP26 and the pressure is on UK businesses to act now. Many are considering more sustainable practices such as buying recycled resources and equipment, reducing travel or using more environmentally friendly forms, modifying their supply chain to team up with partners more sustainable and zero carbon production targets. Our latest research with our own Invoice Finance clients confirms this, revealing that 4 in 5 business owners do not have the systems in place to monitor their impact on the environment, yet 45% plan to invest in these systems and /or new operations. , equipment or practices over the next 6 months to address them. Invoice Finance continues to be a top choice for business owners here by relieving pressure on cash flow and providing the financial freedom to advance their investment priorities.

Whatever the year 2022, Invoice Finance vendors will be there to help business owners meet new challenges or seize new opportunities.

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