Will my customers need to know that I am using invoice finance?

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.

How much does factoring cost?

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.

What security is required?

As the name indicates, no security is taken for an unsecured loan.  There is a loan agreement with the company and a guarantee by its principals.   

Nothing is loaded on the PPSR for an unsecured loan.

For a secured loan security may include a specific security agreement over certain assets, a general security agreement over the company or a mortgage over property.