Are you a Barnacle or a Butterfly?

Posted: 11th April 2024

So how do you manage your cash flow? Like a barnacle or like a butterfly?

Confused? Let us explain...

When it comes to financing a business many of us are barnacles – not realising that there are many different options to managing cash flow outside of traditional bank services.

Butterflies however realise the benefits of looking at dedicated finance companies to provide funds that manage their monthly cash flow.

A traditional barnacle might go to their bank, either for a loan or an overdraft.

Now, there’s nothing wrong with this, but there are many factors that need careful consideration. Not only will the barnacle need to decide on the right amount they want to borrow but the duration of the loan and any early payment penalties they might be liable for. They will also need to secure their funding against their assets – a small business might have to do this in the form of a personal property for instance. So whilst a secured bank loan maybe easy to obtain, they are inflexible. Plus they register on credit scores. Similarly with overdraft facilities, they may be easy to obtain yet they are an expensive way of funding your day to day business.

Yet the business savvy butterflies use options known as Invoice Factoring and Invoice Discounting . With no fixed guarantee against their personal assets, instead their monthly invoices are used as collateral, there’s peace of mind that they are ‘borrowing’ only what they are owed with a constant cash flow effectively maintained each and every month.

Up to 90% advancements are paid on the same day by the finance company for each and every invoice that is raised. There are no cash flow problems or worries here. No, butterflies don’t need to worry about 60 and/or 90 day terms because they are paid the moment their invoice is issued, with the balance of each invoice amount issued upon payment by the client.

Needless to say, often butterflies find it easier to increase stock, manage payroll and look towards expansion as their healthy business is supported by a health bank balance.

A butterfly just like our client, CCD of Family Matters Fostering Limited, who says "They have been able to give us a deal that no other Invoice Finance Company or Bank have been able to come near."

So barnacles, ask yourself another question... wouldn’t it be better to spread your wings and fly like a butterfly?   


Image courtesy of Danilo Rizzuti at