Unless otherwise agreed, your funder will most likely fund invoices for 30 days past their due date, in some cases longer. If an invoices is not paid within this period its status changes from approved to unapproved.
If this leaves a shortfall in your available funds it will be deducted from your next payment.
In most cases your customers will be aware of the invoice finance relationship and understand that they are paying your invoices to a finance company. This is an important step in preventing fraud and protecting your facility. Your finance company will work with you to communicate the message to your customers.
Some businesses may qualify for a confidential facility; however there is strict criteria to be met.
Invoice finance and factoring are becoming more common place in New Zealand now and most customers will be entirely happy with it.
A fee is charged on the face value of invoices. This fee may vary between 1% and 5% depending on the size of the facility and any perceived risks.
An interest rate comparable to the bank overdraft rate is charged on any funds borrowed.