Unmatched flexibility – Keeping invoice finance in the broker’s toolkit

In an article recently published in the Commercial Broker magazine, Paul Stokes Director of FlexABL writes:

As the range of funding options open to SMEs continues to evolve, more business owners are turning to online business loan providers for quick cash flow solutions. The appeal is clear – such loans offer immediate accessibility and convenience. However, while speed and simplicity are attractive, they are not always the best fit for every financial scenario, particularly for businesses with strong B2B sales, yet slow paying customers.

This is where I want to fly the flag for good old invoice finance. Despite the surge of digital borrowing options, invoice finance remains essential within the SME funding toolkit, especially for companies that experience healthy turnover but face consistent pressure from delayed invoice payments.

Unlike traditional business loans, which provide a lump sum repayable over fixed terms irrespective of actual revenue flow, invoice finance is intrinsically linked to real-time sales performance. It allows SMEs to access funds directly tied to their outstanding invoices. This means that liquidity is continuously replenished, aligning precisely with cash flow needs and enabling better financial forecasting and growth planning.

One of the greatest strengths of invoice finance is its unmatched flexibility. As an SME’s turnover grows or fluctuates seasonally, the available funding automatically scales accordingly. This responsive nature makes it ideal for businesses undergoing expansion, experiencing seasonal peaks, or operating in sectors where demand frequently varies.

“Liquidity is continuously replenished, aligning precisely with cash flow needs and enabling better financial forecasting and growth planning”

Additionally, invoice finance providers often offer far more than just funding. They deliver valuable day-to-day support and expert guidance reminiscent of the traditional bank-manager relationship – something many SMEs deeply value but rarely experience in today’s digital-first environment. Invoice finance lenders also commonly assist with credit control, invoice administration, and customer risk management, allowing business owners to dedicate more time and resources to growing their businesses, rather than debt collection and management.

This article is not meant to undermine loan providers and the service they provide – far from it. Their role remains important within the diverse SME financing ecosystem. Instead, the objective here is to emphasise the importance of matching the right funding solution to the specific business needs of each SME.

In the Midlands, for example, we’ve created Midlands SME Finance, a collaboration of six regional ‘non-bank’ lenders working collectively to deliver the message to business owners about taking the right advice, before borrowing. Our goal is to ensure SMEs have access to a balanced and responsive range of financial products, whether it’s a traditional loan or invoice finance, depending on their precise circumstances. In addition to FlexABL, many brokers will be familiar with four of the lenders, as they are also NACFB Patrons: ART Business Loans, BCRS Business Loans, Coventry & Warwickshire Reinvestment Trust (all CDFIs), and Frontier Development Capital.

In summary, invoice finance deserves recognition as a vital component in a well-rounded SME funding strategy. By providing flexible, responsive, and scalable financing, it remains a compelling option, perfectly suited to complement, not compete with, other forms of SME finance.

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At FlexABL, we’re committed to supporting SMEs through tailored financial solutions. If you’re looking to improve your cash flow or invest in growth, get in touch with us today to learn more about our service and how we can help.