What is Invoice Factoring?
Invoice factoring is a cash flow solution that allows businesses to access a large percentage of the funds held in their unpaid sales invoices, from a finance company called a factor. With invoice factoring your business can enjoy the benefits of the cash flow of the invoice before your customer pays it. Positive, steady cash flow is one of the most critical components of the growth and success for small to mid-sized businesses. Invoice factoring allows your business to control its cash flow and focus on business growth.
* Factoring fills a cash shortfall when your customers don’t pay you immediately, but you need the cash flow to run your business
* You forward your invoices to the factoring firm in exchange for a cash advance (usually 80%), less a factoring fee for the factoring service (between 1-3% of the value of the invoice/s)
* The factoring firm now owns the invoices and is paid when it collects from your customers (within your customer invoice payment terms)
* Once the factoring firm has received the outstanding funds from your customer, your business will receive the remainder of the funds, called a rebate
Contact Nova Business Finance to see how we can help your business grow today.