Partner Article

Siemens Financial Services Launches Invoice Finance Service

Siemens Financial Services (SFS) has announced the addition of invoice finance to its range of financing solutions.

Invoice finance is the generic term to describe a range of financial products designed to bridge the gap between the delivery of goods or services and the payments from the customer. The invoice finance provider advances funds against the outstanding sales ledger until the individual debts are paid.

Invoice finance is aimed particularly at small to medium sized enterprises (SMEs) across most industries. SFS’ focus is building a client base of SMEs from a wide range of sectors including manufacturing, engineering, printing, wholesale, pharmaceutical, recruitment, hospitality and more.

In contrast to many other financiers, SFS’ invoice finance service is tailored to each individual company. The invoice finance team works with the client to understand their particular business needs and future plans to build a bespoke solution. By partnering with SFS, SMEs can benefit from working capital facilities that grow in line with their turnover and access to cash through a live system, giving them almost immediate drawdown of all approved invoices.

By using invoice finance, when a company invoices their customer, up to 90% of the approved invoice total is immediately advanced by the finance provider, with the remaining 10% paid once their customer settles the balance. This provides the company with essential working capital so it can then invest in expanding its business without having to wait for bills to be paid.

Research from the Asset Based Finance Association shows that in 2015 British SMEs were owed £67.4 billion in unpaid invoices; a rise of 8% from £62.5bn in 2014. Although many companies view outstanding bills as a drain on their cash flow, through solutions such as invoice finance they can be used to unlock funding.[1]

Invoice finance is rapidly growing in popularity. According to BDRC Continental[2], between 2011 and 2015, the percentage of SMEs using ‘core’ forms of finance (loans, overdrafts and/or credit cards) declined from 39% to 28%. Conversely, the use of other forms of finance (leasing, invoice finance etc) has grown, with 17% of SMEs using one or more of these ‘other’ forms of finance in the last year.

Ian Cole, Head of Invoice Finance, Siemens Financial Services comments: “More and more SMEs are realising that invoice finance provides a flexible solution to the late payment problem in comparison to a traditional loan or overdraft.

“Feedback we have received so far shows that companies appreciate the combination of working with a trusted name like Siemens, whilst also receiving a highly personalised service.

“We have already built a diverse portfolio of clients since we launched in October 2015 and we are looking forward to an exciting chapter of helping more businesses achieve their growth aspirations.”

[1] Asset Based Finance Association, ‘UK SMEs owed GBP 67bn in unpaid invoices’ 21 September 2015 https://www.abfa.org.uk/news/101/UK-SMEs-owed-GBP-67bn-in-unpaid-invoices

[2] BDRC Continental Q2 2015 SME Finance Monitor http://bdrc-continental.com/wp-content/uploads/2015/09/BDRCContinental_SME_FM_Q2_2015-FINAL.pdf

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