Struggling firms ‘turn to invoice finance’

Issues such as late invoice payments are forcing small businesses to turn to credit solutions such as invoice finance, according to new data.

Research from Time Finance has revealed the growing popularity of invoice finance among the B2B community, with demand predicted to rise further throughout the year – as SMEs fight to stabilise their finances.

It revealed that invoice finance is now ranked highest among alternative finance solutions for small businesses, with 32% of financial intermediaries stating that it will be the most popular service to support cashflow this year.

The data forms part of a large-scale review conducted by Time Finance to understand the financial challenges facing businesses – which further highlighted the huge pressure that late payments are placing on small companies. It found SMEs are owed as much as £250k in unpaid invoices, and some are waiting up to 120 days for payments to come through.

Phil Chesham, MD of invoice finance at Time Finance, commented: “We are seeing a real uplift in businesses that come to us, and this is definitely a trend we expect to see continue throughout 2023. At face value, this is an indicator of the cashflow challenges that businesses are experiencing.”

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