What if the lender, pays out the supplier, once goods arrive, guaranteed. Or what if the lender pays for the stock, Freight on Board. Giving you something to think about now.
More stock with Factoring.
Often clients call up for stock finance. This product is extremely hard to ascertain. However, if your business a sound foundation. For example two years financials, strong accounting documentation, and the directors have assets. Traditional lenders will offer you a product. Failing to have these, then your chances diminish greatly. Continue reading “How To Increase More Stock with Invoice Finance”
What is Debtor Finance, Full Service Factoring, or Invoice Discounting?
These facilities are when a business sells all or part of their debtors’ ledger (Unpaid Invoices) to a financier. Owners raise working capital (Cash) for expenses, wages or fuel.
How does debtor-finance / factoring work?
As a result of business delivering its goods/services to its customers, the invoices (trade debts) raised can be sold to a factoring financier.
Most Factoring Financiers can advance up to 80% of the unpaid invoices value. This occurs within 24-48 hours of verification. Therefore the remaining 20% is advanced after the invoice is paid from the client to the lender. Business owners are returned the final 20% less a small fee of about 1-3%.
So the business simply forwards copies of the invoices to the Factoring financier. Once verification of invoices is complete funds are advanced.
The businesses can retain control over accounting functions and collections. They may also opt for the Factoring financier to control this function. In our experience, its wise for your firm to retain the account functions.
What are the benefits of debtor-finance / factoring to a small business?
Consequently funds are readily available. Credit sales are converted into cash normally within 48 hours.
With cash in the bank, the client can negotiate better trading terms with suppliers. They can also ascertain an early settlement, discounts and the ability to buy in bulk.
Eliminate the need to offer settlement discounts to customers. Invoice-Discounting fees are usually cheaper than settlement discounts. With Invoice-Finance clients knows with certainty when they will receive cash.
What are the costs?
Hence different Factoring lenders charge different fees. Lenders base this upon setup structure, size and risk. The average cost of debtor-finance is 3% per month. This will vary depending on your debtors payment terms. The longer it takes for debtors to pay, as a result, the higher the cost.
Why Choose the Trade Debtor Finance Consultants?
Cost: Our firm has no direct upfront fee for our consultation. Confidential: TDFC will not sell your information to a third party. Choice: Our family owned business has access to over 28 trustworthy debtor-finance lenders. Experienced: TDFC consultants have expert experience in debtor-finance and know what lenders to recommend for your business needs Trust: Our policies dictate that you with be given no nonsense answers and will explain all costs Successful: TDFC can give you recent successful client referrals.
Find a facility for your business in your industry
Your Business has made the first step in finding out about Factoring / Invoice Discounting and in most circumstances this is at no direct cost to your firm.
Factoring or Debtor Finance?
It’s a very tricky subject. Funding invoices and getting up to 80% of them in 48 hours instead of 30 – 75 days. Using this cash to catch up bills. Grow your business, buy more stock, and or employ more staff. Then getting the balance of the invoice ( The final 20% less fees) once the debtor pays their account.
The simple answer is yes Factoring does effect your collections. However, most of them are hoping that they don’t pay on time, and they can make additional fees.
What Debtor Finance is all about.
Debtor Finance, Factoring, Invoice Discounting are not all the same product. So how can the collections on these facilities be the same.
The simple answer is “yes”, Factoring does effect your collections. However, most of them are hoping that they don’t pay on time, and they can make additional fees.
Unlock the way to keeping fees down when Invoice Financing
With nearly 45 factoring lenders in the industry, each has a different collection strategy. This will depend on your size, your exposure, and of course the type of facility you have. If you have a facility where there is a daily interest added to your fee, then it would be reasonable to assume, the level of collection would be lower than a firm with a set fee.
Will Banks Help you with collections.
Bank products often do no collections as they are a confidential product, allowing the client to maintain all those procedures as the bank has access to the trading account to monitor. Smaller lenders don’t have that luxury and whether its disclosed or not, the client has to maintain constant checks to ensure that their accounts are up to date and their not incurring added interest or late fees.
Disclosed lenders, often put out statements, and will verify a percentage of the invoices, this acts as deterrent in most cases for the slack paying clients. Also seeing a financial firm on the bottom of the invoice, often makes clients avoid any nasty stuff come pay day.
However, conflict will often start if the debtor goes beyond terms, and its a large piece of your ledger. Factoring firms, will put other invoices on hold. As a result assist in heavy collection calls to avoid there being a bad debt. So please stay on top of your accounts when factoring.
For more information in regards to the different facilities, please call our office on 1300 00 8332 or email: firstname.lastname@example.org Trade Debtor Finance supports up to 28 lenders in Australia and each facility is different. At no direct cost to your firm, we offer our recommendations in writing. Therefore TDFC support your firm for the life of the loan.
Trade Debtor Finance Consultants is offering at no direct cost to business owners, Debtor Finance Free Review.
Trade Debtor Finance Consultants proudly supports a wide range of lenders in the industry. Every Client that our firm interviews, we use expert knowledge and find the lenders that suit their needs.
This is not an easy task as each lender has different facilities, different products, and different pricing on offer.
How do you know you have the right deal?
Basically you don’t. Why Guess. Speak to a consultant today and see if we can help you get some piece of mind in choosing the best lender for your business. We know Invoice funding.
Most business owners rely on sales slowly increasing each month or year to justify growth. If your business is seasonal, this is very difficult to ascertain opportunities to purchase goods.
Factoring or Debtor Finance allows owners to purchase those goods, employ extra staff, or grow marketing. These opportunities can give owners dreams a reality. Therefore if you have a debtors ledger of $10 000.00 or more you can ascertain access of $8 000.00 within 48 hours instead of waiting 14 days or more for payment.
There has been some progress in construction and Importers have rallied. Here at Trade Debtor Finance Consultants we have seen some increase in inquiry and the range of businesses needing cash flow is a good sign.
Our business gives business owners the ins and outs of Factoring, Debtor Finance, Invoice Discounting at no direct cost to themselves. Trade Debtor Finance Consultants is a family business who stand by their clients through the thick and thin.
Having over 15 years experience, with the support of up to 28 different lenders, and 9 different products, we will give you the best choices and insights into these products.
Factoring, Debtor Finance is still the best way to improve cashflow in your business without putting up security. Factoring, Debtor Finance is still the most flexible way of funding your business growth. Its not the cheapest, but its reasonable for the risk and flexibility it provides. its also a facility that grows with you. No going backwards and forwards to banks, trying to secure more on overdrafts etc..