Is Invoice Finance a Credible Alternative to Bank Loans?

Invoice finance (IF) is not considered a credible source of finance among some business owners because of its relatively high cost and onerous terms. Is this perception justified? I will argue it is not with the introduction of single invoice finance.What is invoice finance?It is the sale of a company’s sales ledger for cash providing an ongoing source of cash as invoices are issued to customers by the company. The company might retain the collection of cash or transfer this and the associated credit risk, to the funder.Some conventional IF facilities can impose numerous types of fees and charges, and require security and a commitment from the company to sell the its entire sales ledger to the finance company.Some companies offer a refreshing financial alternative, offering to buy just a single invoice and charging as few as just one fee and generally offering a more flexible funding alternative.What is single invoice finance?As its name suggests, it is the purchase of one invoice for cash from a company. The company does not need to sell any further invoices so single invoice finance can be used by companies to raise cash as they need it. Also, they might not need to provide security such as a debenture or a personal guarantee.Single or multiple IF are effective tools for cash management because they liquidate illiquid assets i.e., they convert debtors into cash. The cash realised can be reinvested by the company in profitable projects or used to pay back expensive debt.Some borrowers might argue that on an annualised basis, the cost of invoice finance is high compared to a conventional loan. That comparison is like comparing apples to oranges because the two financing instruments work differently. A loan is a continuous source of finance whereas single invoice finance is discrete – providing finance for up to 90 days or less. Annualisation of the cost of invoice finance is not therefore consistent with its use.Though the interest rate on a loan might look relatively attractive, the cost of arranging and administering it must also be factored in, such as the arrangement, commitment, non-utilisation, and exit fees, plus servicing charges and legal costs of documentation. There might also be costs to pursue and recover bad debts, or to pay for credit protection. Invoice finance has its own arrangement and administration costs that might be more or less than a bank loan.Invoice finance is therefore a credible alternative to a loan because:

it converts a company’s debtors into cash that may then be reinvested to potentially generate positive return for the company.

the company can transfer debtor credit risk.

it avoids using up a bank’s limited credit capacity for a company and

it diversifies the company’s sources of funds so reducing its reliance on the banking sector.

companies can use it to raise cash as needed

security might not be needed

Your Positive Attitude: The Choice to Lead a Happier Life

Attitude is everything.It’s something parents and coaches say. But is it true?While it might not be quite everything (because a positive follow-up is pretty important, too), a positive attitude is a huge key to your success and happiness in this life.That’s because positive experiences beget positive experiences. The more positive actions, feelings, and moods you can generate in yourself, the better you’ll feel and the more positive the attitude will be that you display to others. When you are around more positive people, it will be easier for you to stay positive. Then you’ll naturally attract people with greater success and you’ll be more open to life’s good opportunities when they present themselves to you. On it will go, in an ever-widening upward spiral of success.Put more simply, if you have a negative attitude, you will naturally invite negativity. If you have an attitude for positivity, you will naturally invite positivity, and, it follows, greater success and happiness.So how do you develop this positive attitude? Here are five thoughts that might help on your personal journey to a more positive mental attitude.1. See your life as a series of simple choices. Like a lot of things in life, if you can begin with small, manageable baby steps and don’t get intimidated by the process, you’ll go far. You don’t have to come out the door singing “oh what a beautiful day” every morning to be a positive person. You can be a positive person within the realm of your own personality type. Just try to remember, throughout your day, that you always have a choice whether to look at something positively or negatively. You always have a choice whether to respond to something positively or negatively.2. As much as you can, surround yourself with other positive people. Especially when you are just getting started trying to maintain your positive attitude, you will be vulnerable to a friend’s toxic thoughts and actions. If many of your friends are chronic complainers or they always leave you feeling exhausted, strive to cultivate more positive friendships. Positive friends bring you up, reveal your hidden strengths and make you believe in the power of your own positive attitude and success. Allow their infectious attitude to take hold in you. Then strive to be a positive friend yourself. You’ll naturally attract even more of these uplifting friendships.3. Rise above. Look at your goals and edge them just a tiny bit higher. If something is important to you, don’t settle for mediocre. Step up from where you are right now by honing your skills and climbing the ladder to bigger and better. Don’t allow yourself to become bored and complacent with your routine. That’s no way to live. When you get bored, it’s easier to allow yourself to fall into negative thinking. Have a dream for yourself that’s so big, you’re excited to get out of bed each morning so that you can edge yourself closer to your goal.4. Use your challenges to spur you even higher. If you find yourself in a difficult situation, don’t allow yourself to give in to negativity. When we are faced with challenges, it just means we are getting out there and really living. That’s a good thing. When you are faced with a challenge, allow it to motivate you. Look for the opportunity in the challenge. What is this trying to teach you? How can you use this difficult situation to become a more positive person with an even better attitude about life?5. Serve, positively. Model your positive attitude to people around you. As a parent or as any other role model in your community, make a point to be as positive as possible, and watch how the power of positive thinking and a positive attitude actually ripples through a community. When you share a good attitude with others, they will share it, in turn. You can make a huge difference in just the choice that you make right now: Will you be a positive person or a negative person?One of the most important things to remember, your whole life through, is that you have a choice – at every age and every stage, with everything you do, say, and think – to be positive or negative. Those individual choices will add up to create the life you lead and the kind of effect you have on the world. Make your legacy as positive as humanly possible and you’ll lead a happier life, naturally.