How invoice finance – done well - compares to other funding options

Hydr explains why accessing the cash you’re already owed within 24 hours is better than extending your borrowing

25th August 2021, 4:54 pm

Done well, Invoice finance is a type of asset-based lending that helps businesses get paid almost immediately for the products or services they have delivered and invoiced, rather than waiting for the duration of the payment terms or worrying about late payments. What is the asset? It is the invoices that a company has issued which have yet to be paid by the customer.

Small businesses should consider invoice finance instead of other types of lending because it advances the cash you have already worked hard to earn, rather than taking on new debt. It’s that simple.

Hydr vs. a bank loan

Bank loans often require a lengthy application and approval process. New and small businesses can lack the credit history and assets that the bank is looking for when evaluating a loan application, so it can be quite tricky for them to secure.

With Hydr there’s no complicated paperwork or lengthy approval processes. Funding decisions are made in real time through our digital onboarding and integration with Xero.  For fair and fixed fee we pay 100%  of your invoice within 24 hours. No extras, no interest, no hassle.

Hydr vs. an overdraft 

Through Hydr, you are unlocking cash for work already delivered. It’s an advance on the money you’ve earned and you have full visibility on the fixed fee you will be charged to have your cash in the bank within 24 hours. With an overdraft (a bank facility where you can withdraw funds in excess of your balance), you are creating a new debt with mounting, variable charges, including the daily interest and additional charges incurred if you go over your limit.  When you take out the overdraft, you will never know the final cost of the funds you are borrowing.  With Hydr, we tell you the fee upfront and it doesn’t change.

Hydr vs. a credit card

Credit cards can come with very high-interest rates and if you can’t pay back what you borrow, your debts can quickly mount up. This can also impact your credit rating and ability to secure future funding. You can get hit with extra fees too, like going over your credit limit or being charged to use an ATM.

With Hydr you are not taking on any new debt and you have complete visibility on exactly what the fixed fee will be for payment of your invoice, in full, within 24 hours, giving you complete peace of mind.

Hydr  vs. supply chain finance

What we do and supply chain finance are the same, right? Wrong.

In supply chain finance, the buyer of your product or service agrees that they will pay your invoice early for a discount. The benefit to you is that you receive early payment. The benefit to the buyer is they can further extend their payment terms.

The big difference is that these funding decisions remain with the buyer, not the supplier. They decide the funding partner and they dictate the terms, such as the amount of the discount the supplier has to accept. What this means is that supply chain finance doesn’t change the often unbalanced relationship between big customers (who are often the ones with the very long payment terms) and small business suppliers. You, as the small business supplier, do not enjoy the certainty and control that you do with Hydr.  With us, you determine what invoices you would like to finance based on your cash flow needs.  We hold you to no contracts or subscriptions keeping you in complete control.

Invoice finance by Hydr

If you want to be in control of your choice of finance partner but also get paid almost immediately for your work, give us a try today. Our fees are fair and fixed, we have no hidden charges and absolutely no mounting interest. We protect each invoice with credit insurance as part of our fee and, even if your customer is a few days behind making payment, that fee stays fixed.

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