We have a number of Invoice Finance options for our customers. Imagine getting paid 80% of every invoice you issue with in 48 hours? Would that dramatically help your cashflow?
WHAT EXACTLY IS INVOICE FINANCE?
Invoice Finance is simply the use of outstanding debtors/accounts receivable to raise working capital. Invoice finance is not a loan it is the sale of trade debts/invoices for cash to bridge the cashflow gap between the time the sale is made and when the customer pays.
HOW DOES INVOICE FINANCE WORK?
As your business delivers its goods/services to its customers, the invoices raised may be sold to a financier, freeing up to 80% of their value almost immediately. The remaining 20% is advanced monthly, based on collections. The business simply forwards copies of the invoices to the financier. Funds are advanced within 48 hours. The client retains control over accounting functions and collections (and the important relationships they have with their customers).
WHAT ARE THE BENEFITS OF INVOICE FINANCE TO A SMALL BUSINESS?
Invoice Finance offers the small business flexibility, as the following benefits illustrate:
- Funds are readily available: credit sales are converted into cash normally within 48 hours.
- With cash in the bank, you can negotiate better trading terms with suppliers, including early settlement discounts and the ability to buy in bulk.
- Eliminate the need to offer settlement discounts to customers. Invoice Finance fees are usually cheaper than settlement discounts. With Invoice Finance you know with certainty when you will receive the cash.
WHEN WOULD YOU WANT TO CONSIDER INVOICE FINANCE?
Rapidly expanding business
Businesses may become starved of cash in times of rapid growth. Invoice Finance can accelerate cash flow to alleviate this problem.
Entrepreneurs are often skilled in production or marketing, but not in cash management, and a cash flow crisis may result. A traditional financier may view a crisis as the very reason for rejecting credit, whilst our financiers may view it as an opportunity.
An Invoice Finance Facility can be used to supply top up funds and/or ongoing working capital as part of a total refinancing package.
Start-ups/Acquisitions: Invoice Finance assists by funding the sales made on credit terms as the acquisition start-up is consolidated.
Coping with the Tax System
Invoice Finance can help smooth cash flows that have been squeezed by the requirements of the PAYG system and GST. Any business, which must give credit to make sales, can benefit from using Invoice Finance.