What is Debtor Finance?

Debtor finance is another term for invoice finance. It can also be called invoice factoring, invoice discounting, or accounts receivable finance. Put simply, it allows you to improve your business cash flow by accessing a percentage of the value of your unpaid sales invoices in the form of a cash advance. The invoices themselves act as security. That is, no real estate security is required. This allows your business to get paid quickly.

How does it work?

Simply send your invoices to the debtor finance firm. The debtor finance firm will provide an agreed-on percentage cash advance of the invoices to your business, usually 80%, generally within 24 hours of confirmation of the invoices being received. Your customers pay the money owed on the invoices directly to the debtor finance firm. Once your customer’s invoice payments are received, the debtor invoice firm provides your business with the remaining invoice balance, known as a rebate, less any fees for the finance service offered.

 

What are the benefits?

It means you do not need to wait for the payment of your invoices. You can unlock most of the money quickly and easily, providing you with positive cash flow for immediate business expenses and/or business investment and growth. Another benefit is that you do not need to go through a bank for a line of credit which can take weeks for the approval of money you need for your business now.

What is the cost?

The cost varies and is dependent on the size of your invoices, the quantity of invoices, the duration of your invoices, and the quality of your customers.

Debtor finance is a great solution for small to mid-sized businesses wanting access to the working capital they need to cover their expenses. Contact us today for an obligation-free discussion to see how we can help your business prosper.

3 Quick Tips to Improve Business Cash Flow

Business growth is an exciting time for any entrepreneur. However, sustaining positive cash flow may be easier said than done though the normal ups and downs of the business cycle, such as seasonal events, and long invoice payment terms, to name a few. However, there are always ways to improve your business cash flow.

Here are 3 quick tips to improve your business cash flow:

1. Review old equipment and inventory

Looking at options for equipment finance and/or asset rentals can be cost-effective, and dependant on the circumstance, it can increase your speed and efficiency to increase production, or take on new projects, which leads to more incoming cash flow. There will also be money saved with not having to manage and organise for repairs, as you’ll always have the latest technology. Why not seize the opportunity during current historic low interest rates! 

2. Consider invoice factoring

Even if you have incentives in place for your customers to pay their invoices quickly, be it by giving discounts, offering online payment options, or enforcing late fees, the invoice payment terms can still place a delay on money owing to your business for products or services completed. This can place a crunch on the cash flow you need now to meet wages, new equipment, or growth. 

This is where invoice factoring enters as a solution, allowing your business to access a large percentage of the funds held in your unpaid sales invoices. You simply forward your invoices to the factoring firm in exchange for a cash advance, and the factoring firm now owns the invoices and is paid when it collects from your customers. Imagine what you could do tomorrow, if you got paid today, for the work you did yesterday!

3. Customer Loyalty

Your customers returning is key to business cash flow and growth. The above two points can certainly play into their customer satisfaction. If you present as a quick and efficient business with the latest technology, who also offers unique invoice financing solutions for your customer’s (and your) benefit, it can lead to a win/win scenario. Your loyal customers will also turn into an advocate of your brand which will bring in even more business. 

Being strategic about your business will improve your cash flow. The normal ups and downs of the business cycle will always be there, but the pressure will be less with a positive cash flow solution in place. Contact us today obligation-free for a cash flow solution for your business.

What Is Invoice Factoring?

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.

Pro tips:

* 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.

Invoice Factoring – an Alternative Financing Solution

The only collateral you need are the invoices from your customers. Invoice factoring companies do not require many documents compared to banks.

Invoice factoring is a great way to get positive cash flow in the form of short-term working capital to keep running your business without having to worry about cash flow to cover business expenses such as salaries and rent. With invoice factoring, you are also assured of the cash flow to produce goods or offer services to your clients.

Contact Nova Cash Flow Finance today to find out how we can assist your business.

How Can Cash Flow Finance Help Business?

SIGNIFICANCE OF CASH FLOW FINANCE IN A BUSINESS.

1. Cash flow finance is an option when your company has a short supply of money whilst waiting for invoices to clear. It often happens in small businesses as they build a customer base, and when they are growing. It may even occur in businesses where sales are seasonal and have specific natural peaks and troughs.

2. Cash flow finance is an option when you need an injection of funding to make a quick investment in pieces of equipment and other genuine business needs.

3. Cash flow finance is obtained fast and can help your business from falling or collapsing.

4. Cash flow finance assists business growth and expansion.

5. Cash flow finance can assist your business to diversify product lines.

Contact Nova Business Finance today to see how we can assist your business.

Why Invoice Factoring is the Best Source of Growth Capital

Growth capital is private equity used when a business wants to expand its facility, buy equipment, or enhance sales and marketing strategies. With extra capital injection, many small businesses can grow. But, sourcing growth capital is not an easy task. One of the best methods to source capital for the expansion of small businesses is invoice factoring.

Many businesses offer credit to their customers, especially those buying in large quantities. This causes the tying up of funds that businesses could otherwise use for growth. Invoice factoring these transactions can help you acquire funds for the expansion of your business through cash advances from your invoices.

Benefits of invoice discounting as a source of growth capital

Alternative to loans

Due to the limits and constraints that loans put on small businesses, it is challenging for them to grow. Invoice factoring has fewer formalities than banks giving a platform for small businesses to source capital.

Increased cash flow

Since growth capital is tied to working capital, it is important for small businesses to have an immediate method to improve their cash flow. Invoice factoring offers a simple solution for small businesses to achieve those short-term objectives, which leads to long-term business growth.

Access to business advice

Information about how business processes are conducted to achieve growth is vital for small businesses. Invoice factoring finance lenders have the know-how on how to achieve business growth. Despite these institutions providing you with growth capital, they also advise you on how to use it.

Credit protection

In the event that your customers are unable to pay for your invoice, you are at least insured against it. Many lenders offer debt protection for a period that you select. If your customers are aware of this, they will most of the time comply with the repaying terms.

Grows as the business expands

If you invest the money you get from invoice factoring into expansion, your business will be in a position to offer more credits leading to a growth in your invoice discounting status.

If you want an easy and effective method to get growth capital for your small business, you should consider invoice factoring. This method does not overwhelm you with complex processes and restrictions when you are beginning or growing.