We are all aware that the coronavirus has caused huge economic pressures, causing problems in cash flow in every sector.  As a result, businesses are finding it even harder than usual to get their invoices paid.  This is causing headaches for both suppliers and buyers.  Suppliers are sitting on mountains of unpaid invoices and as a result buyers are being asked to pay up front. Does that sound familiar to you?  If so, you’re not alone.  Research from business lender, iwoca, found:

  • 40% of suppliers are waiting for an average of £10,000 of outstanding invoices to be paid
  • 41% of buyers have asked for an extension of payment terms in the last 30 days
  • 3% of businesses report owing between £20,000 and £50,000 to their suppliers
  • Many suppliers are considering asking for payment up front to avoid non-payment

It’s not surprising that businesses are reluctant to release cash, equally, we all need our invoices to be paid to survive, particularly in this economic climate.   To help businesses with this, iwoca has launched a new payment solution called iwocaPay. So, what is it? And how can you use it to your best advantage?

iwocaPay works by allowing suppliers to get paid up front and on time, while at the same time buyers can spread their payments over 90 days.  iwoca becomes the bridge in these transactions, leaving suppliers without the stress and time wasted in chasing invoices and buyers able to procure the resources they need, when they need them.  It sounds like a win/win situation helping both suppliers and buyers.

How do you access it?

Suppliers and buyers can check their eligibility for iwocaPay online, iwocaPay say it will take 5 minutes. Provided you are approved, invoices from suppliers are paid in full and the buyer can choose to repay iwoca in the first 30-days for free or over 90 days on a payment plan.  The buyer can make full payment at any time with no additional fees.  Invoices from £150 to £15,000 are covered

Is it a good idea?

Well in theory it works better for suppliers than other forms of financing.  Trade credit schemes can leave the supplier waiting for anything from 60 to 120 days for payment and may still leave them open to loss if the buyer does not pay.  iwoca, will pay suppliers immediately and in full.  They also say they will never ask the supplier for cash – even if the buyer doesn’t pay them

For buyers, it offers the option to finance resources they need for business on a flexible payment plan, up to 90 days, and with the option to repay in full at any point. Once you’re approved you’ll be able to clearly see how much it costs before choosing to proceed. 

If you would like to know more or need advice on whether this method might be a good choice for you, contact us now.

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