Invoice Finance and Factoring
Can’t wait 30-60 days to get paid? The wait is over …
When the time lag between paying suppliers and staff and getting paid for the work done or goods delivered is too long, invoice finance removes the wait.
If your profit and loss statement and balance sheet both look healthy, but you still find you can’t pay your bills, chances are your working capital is locked up in your accounts receivable ledger. Invoice finance unlocks the money that you otherwise can’t access until your customers pay.
Discover financial freedom with invoice finance. Pay your bills on time. Pay your tax on time. Pay your staff on time.
How Invoice Finance and Factoring Works
You invoice your customers as normal, and submit copies of invoices to your funder
Depending on the type of facility you have, your funder may verify all, some or none of the invoices with your customer
Up to 95% of the face value of the invoices is paid to your bank account
Your customer pays their invoices to your funder
Additional cash is released when available
Keep submitting invoices, and keep getting paid immediately!
types of iNVOICE FINANCE FACILITIES
FULL SERVICE INVOICE FINANCE (disclosed)
You can choose to fund against your entire debtors ledger. This means all invoices for all customers are submitted to your funder. Your customers will be aware that they are paying their invoices to your funder. Your funder will make collection calls on your behalf, and send monthly statements. With this solution you are also getting a full accounts receivable service.
If you have doubts about a disclosed facility, have a read of our article about disclosed invoice finance.
partial ledger
Select just one debtor, or a few debtors to fund against. For your selected customer(s) you submit all invoices to your funder. This facility is usually disclosed, and will include your funder making collection calls and sending out statements to your selected customers.
SINGLE INVOICE FINANCE
Select individual invoices for funding against, whenever you need a cash injection. This facility will always be disclosed as your customer must agree to pay financed invoices to your funder.
CONFIDENTIAL FACTORING
For those who qualify, a confidential facility can be a great solution. In this case, your customers are not aware that they are paying your funder. You simply notify them of a change in bank account. You will be responsible for collection calls and sending out statements.
Am I eligible for invoice finance?
There are three main criteria for being eligible for invoice finance:
You provide goods and services to other NZ businesses on credit
Credit terms are 20th or end of the month following, or 30-days from invoice date
Your turnover is $10,000 per month or more
Five ways invoice finance can help your business
No more waiting to get paid for your invoices – invoices are usually funded within 24 hours of being submitted to your finance company. Often you can get paid on the same day you submit invoices.
Cash in your bank to grow your business – sometimes it is difficult to accept new clients or new projects because you don’t have the cash in the bank to buy the supplies or materials needed to start the job. Bringing forward the receipt of payment of your invoices, you have the cash needed to accept that job, start that project, or sign that deal.
Pay your bills and tax on time – often you are buying supplies, materials and paying for labour before you are paid for the job. By getting your payment for the goods or services provided sooner, you can stay on top of your outgoings.
Win new business with competitive credit terms – what holds a lot of businesses back is that they simply don’t have the cash reserves on hands to do business with other businesses who insist on longer credit terms. Instead of being restricted to doing business with customers that agree to pay within seven days, you can confidently pitch for new business with longer credit terms as part of your offer.
Forget about chasing late payments – chasing up late payers is an ugly job and something you might shy away from, resulting in an aged receivables ledger full of old invoices. With a disclosed invoice finance facility, your finance company chases up payments on your behalf. If it is something that you did do in the past, your finance company will free up some of your time to focus on what’s important: your business.
For more insights, read our article about how invoice finance helps your business when credit terms required by your customers are longer than you’d normally like.
You could also check out our guide to decoding your invoice finance facility agreement so you can understand your documentation.