Small businesses awaiting payment from their larger customers can have 100% of their invoices paid in full, in advance, thanks to a new finance product from Nucleus Commercial Finance.
Nucleus 100% Finance, advances businesses on average 20% more of the value of their invoices compared to ‘traditional' factoring and is one of a series of products developed to meet the specific needs of the small business economy.
Chirag Shah, Managing Director, says that the new product suits those businesses that are not hampered by contractual debt: "Businesses that have ‘clean debt', that sell a product or service and then invoice for that product or service, are the ones most likely to benefit".
Nucleus Commercial Finance has engineered its new product by thinking differently: assuming the business has no contractual debt, and has an asset (in the form of a building or plant and machinery) against which Nucleus can secure a guarantee, then it will offer 100% of the invoice value in advance.
It is then the responsibility of Nucleus to recover payment from the supplier, for which the business pays a fixed fee (typically around 1.5% of its annual turnover), based on a 12-month contract; there are no hidden or additional costs.
Chirag commented: "Having the full value, rather than a smaller percentage, gives businesses more of their money up front to pay suppliers, negotiate better terms and conditions, and invest in order to grow.
"Not all companies are the same," he continues, "and invoice finance providers need to move away from thinking that a ‘one size fits all' approach will work in the future; indeed it hasn't worked in the past, which is one of the many reasons why invoice factoring has never received the focus it deserves."