When a customer chooses to buy equipment outright rather than lease it, that’s still a successful sale. But for the supplier, it can mean waiting another four to eight weeks for payment.
At Axis Leasing, we regularly see this happen. A supplier requests a leasing quotation, the customer ultimately decides to pay cash, and the supplier is left financing the order until the invoice is settled.
To help businesses manage this gap, Axis Leasing can now introduce suppliers to Novuna Business Cash Flow for invoice finance solutions.
Why a Successful Sale Can Still Create Cashflow Problems
With a lease, the funder normally pays the supplier promptly once the equipment is delivered and the necessary documentation is completed, while the customer pays the funder over the agreed term.
When a customer chooses to buy outright, the invoice may instead join their normal payment run, leaving the supplier waiting several weeks for the money to arrive.
Take a £60,000 equipment and installation project, for example.
Before the customer has paid anything, the supplier may already have purchased the stock, paid its installers and settled its own supplier invoices. Wages and overheads still need to be met.
If the customer pays after six weeks, the supplier has funded the entire project from its own working capital during that time.
The effect extends beyond one order. A supplier waiting on several large payments at once may be reluctant to take on the next project because of the additional financial commitment.
How Invoice Finance Works
Invoice finance allows a business to access funds against eligible unpaid invoices rather than waiting for customers to pay.
Depending on the facility, the finance provider may advance up to 90% of the invoice value, helping release working capital that would otherwise be tied up for weeks.
For suppliers, this can mean:
Improved cashflow without waiting weeks for customer payments.
Funds available to help meet supplier invoices, wages and other commitments.
Greater flexibility to take on new orders while awaiting payment for completed sales.
With invoice factoring, the finance provider can also take responsibility for credit control and collecting payments from customers.
The amount advanced, charges and terms depend on the individual business and the facility agreed.
What to expect from Axis
With nearly 30 years’ experience arranging equipment finance, Axis Leasing understands the challenges suppliers face when managing larger orders and projects.
Through our relationship with Novuna Business Cash Flow, we can now help businesses explore invoice finance alongside traditional equipment leasing.
Unlike our leasing quotations, cashflow finance facilities are individually assessed by the funder. The business, its trading circumstances and funding requirements are considered before a proposal is made.
This service is available to existing Axis Leasing suppliers and other businesses looking to improve their cashflow.
Common questions
Is it the same as a lease? No. A lease funds the customer’s purchase of equipment. Cashflow finance supports your own cashflow while you wait to be paid.
Who provides the funding? Axis Leasing has teamed up with Novuna to offer business cashflow finance.
Does it replace leasing? No. It sits alongside it, for the times a customer chooses to pay by invoice.
Could invoice finance help your business?
If waiting for customer payments is putting pressure on your cashflow or limiting your ability to take on new orders, we’d be happy to discuss your requirements.
Contact Axis Leasing to find out how we can help you explore invoice finance through Novuna Business Cash Flow.
