Businesses should explore invoice financing as a credit crunch loomOct 26 2018 in Business Cash Flow, Invoice Factoring
Are you a small business owner? You’re probably facing a credit crunch as banking regulations have tightened due to the Royal Commission’s highly legalistic interpretation of responsible lending laws.
According to the Financial Review (Sep 2018), The Australian Prudential Regulation Authority is forcing banks to apply tougher tests on borrowers’ income and expenses, also delaying the time it takes for loans to be approved.
Mark McKenzie, chief executive of the Australian Convenience and Petroleum Marketers Association said to the Financial Review “Loan-to-valuation ratios (LVR) offered by banks to small firms in his sector has been slashed in half. About a year ago, small service station operators could attain an LVR of up to 75 percent. At the moment no one can get an LVR over 30 percent.”
That being said, small business owners need to look at alternative financing options to sustain their cash flow.
Why explore invoice financing?
Invoice financing, also known as invoice factoring, allows business owners to finance outstanding invoices. BCashflow Positive invoice financing advances you immediate cash collateralised by your unpaid invoices. It’s a great way to ensure you can still be on top of your operating expenses when your customers are slow in paying their invoices.
Invoice financing is also a great way to boost working capital when your company is experiencing rapid growth.
BCashflow Positive invoice financing
Applying for invoice financing with BCashflow Positive is simple and fast. Our online application takes 3 minutes to complete and an approval can be provided in as quick as 24 hours.
How invoice financing works?
Accessing funds from your unpaid invoices is as easy as 1 2 3:
1. Send us copies of invoices you wish to draw funds against.
2. Up to 90% of the invoice value is credited to your account in as quick as 4 hours.
3. The remaining 10%, less any accrued fees, is transferred to you when your customer pays us.
For more information on invoice financing with BCashflow Positive, call us at 1300 937 292, or fill out our quick contact form and we will be in touch shortly.
Scale your business by factoring your accounts receivableSep 25 2018 in Business Cash Flow, Invoice Factoring
Are your clients taking up to 90 days to pay invoices and it is affecting your cash flow?
Factoring your accounts receivable can be a great solution to cover the gap of slow payments. It can also save you time as factoring companies like BCashflow Positive will also assist with the follow up of outstanding factored accounts.
As a business, any strategy you can incorporate to enable you to focus more on growing your business, is invaluable.
How does accounts receivable factoring work?
Accounts receivable factoring is an easy process and a fast way to get your invoices paid immediately. Here’s how it works with BCashflow Positive:
1. Invoice your clients for services or work completed and send BCashflow Positive copies of invoices you want funded.
2. BCashflow Positive will credit your account with up to 90% of the invoice value in as quick as 4 hours.
3. Once your client pays the invoice in full to BCashflow Positive, we will credit the remaining 10% to your account, less any accrued fees.
Advantages of accounts receivable factoring
Expanding your business is much easier with the available cash provided by accounts receivable factoring. You can add on more equipment or staff, implement new marketing strategies, or introduce new products.
You can also take advantage of supplier discounts by paying early, or get on top of your ATO obligations.
Why accounts receivable factoring with BCashflow Positive?
BCashflow positive is a leading Australian factoring company with over 28 years’ experience and offices nationwide. Other key benefits include:
· Fast approvals: Within 24 to 48 hours.
· Flexible funding: You can choose what invoices you would like funded.
· Transparent Fees: Use our online calculator to work out exactly how much funding you can get and how much it is going to cost.
· Industry Experience: We provide flexible cash flow solutions to a wide range of industries.
For more information on accounts receivable factoring with BCashflow Positive, call us at 1300 937 292, or fill out our quick contact form and we will be in touch shortly.
Invoice finance vs business loans: Which is right for you?Aug 21 2018 in Invoice Finance
If you operate a small business and are looking to gain fast access to extra cash flow, then both invoice finance and business loans can be good choices. In this article, we will explore the advantages & disadvantages of both.
Invoice finance works by using your invoices as collateral to gain access to your money now. You can essentially get funds owed to you ahead of time. For example, instead of waiting up to 90 days to get paid by a client for a $500,000 invoice, you can receive up to 90% of the invoice value from an invoice finance company like BCashflow Positive, in as quick as 4 hours.
Some of the benefits of invoice finance are:
– Instant cash flow
– The more sales you make the more cash you can get
– Cover the gap of slow payments
– The process is usually much swifter and easier than securing loans
– Suitable for startups requiring working capital to expand
One of the disadvantages of invoice finance is that it is not suitable for all businesses. To find out whether invoice finance is suitable for your business contact BCashflow Positive today.
A business loan is a creation of debt by a business, which is paid back over time with added interest. One of the core benefits of acquiring a business loan is being able to spread out repayments over time.
The downsides of securing a business loan are:
– Business loans typically take a long time to process
– You may have to put up large amounts of personal or business collateral to secure the loan
– You might not be eligible if you’ve not been in business long enough
Making the right choice for your business
If you are in need of quick funding to help seize an opportunity, then invoice finance can be a great alternative. BCashflow Positive invoice finance provides fast 48 hours approval and funding can occur in as quick as 4 hours. We aim to be open and honest with all businesses looking to use our service. That’s why we have a handy calculator, which lets you work out exactly how much you will be charged and how much funding you can get. To find out more call 1300 937 292 today!
The Importance of Positive Cash Flow for SMEsJul 20 2018 in Business Cash Flow
Cash Flow is a great signal to indicate the health of Small To Medium Enterprises (SMEs). Positive cash flow puts a company in a better position to grow and sustain the business.
However, if the business cash flow is constantly in negative, there should be an immediate concern to find out what is causing the problem. Not all situations are alike. However, many common issues can be solved by taking advantage of debtor financing with BCashflow Positive.
What is Cash Flow?
Cash flow takes into account the total amount of cash you have on hand. It looks at the total cash from one billing period to the next and compares money in with money out.
If you have money left over, you are cash flow positive. And if you’re left with a negative number, then you’re cash flow negative.
Why is Positive Cash Flow Important?
As the saying goes, “Cash is King,” and for a good reason. Having surplus cash is necessary for meeting operating expenses like wages, and unexpected expenses that might pop up like servicing equipment that requires maintenance.
There are many reasons why a company is cash flow negative. Poor cash management is a common factor with SMEs, which can lead to problems like restricted growth or worse, insolvency.
Even a profitable company has the chance of going out of business when the negative cash flow is a long-term issue. The lack of available cash is what can cripple a business over time.
BCashflow Positive Can Solve Your Negative Cash Flow Problem
A prime contributor to negative cash flow is slow payments. This can cause a huge strain on a company’s cash flow, particularly if clients can take up to 90 days to pay.
Debtor financing with BCashflow Positive can provide your business with immediate cash flow and it is as easy as 1 2 3.
1. Invoice your clients for sale of goods or services and send BCashflow Positive a copy
2. Get up to 90% of the invoice value in as quick as 4 hours.
3. Receive the remaining 10% when your customer pays us less any accrued fees.
Call BCashflow Positive today on 1300 937 292 and get cash flow positive!
Debt Factoring – A great alternative finance optionJun 27 2018 in Invoice Factoring
Poor cash flow can pose significant challenges for any business. BCashflow Positive’s debt factoring can improve your business cash flow by injecting immediate cash into your business. It is a great alternative finance option for businesses needing additional working capital to finance growth and to keep on top of operating expenses.
Australia’s demand for alternative finance continues to rise
According to a study conducted by KPMG, Australia’s alternative finance market has grown to be the second largest in the Asia Pacific just behind China.
Invoice trading is also known as debt factoring in Australia was up by 24 per cent to US$129.91m in 2016.
What is debt factoring?
Debt factoring allows your business to finance your sales invoices instead of waiting up to 90 days for your clients to pay. The factoring company pays you a portion of the total amount owed on your invoices allowing you to instantly improve your cash flow.
How does debt factoring work with BCashflow Positive?
Convert your invoices into cash in three very simple steps:
1. Send us copies of invoices you would like us to fund.
2. We will verify your invoices for accuracy and transfer up to 90 of the invoice value to your nominated bank account within 4 hours.
3. Receive the remaining 10% less any fees accrued when your customer pays us.
What are the benefits of debt factoring with BCashflow Positive?
With Banks tightening their credit policies, debt factoring with BCashflow Positive can be a flexible alternative finance option. There is no property security required, no quarterly audits, fast approval within 48 hours, and funding can occur in as quick as 4 hours.
Debt factoring can help your business cover the gap of slow payments from clients, finance growth by improving cash flow and working capital and keep on top of ongoing expenses like wages and ATO obligations.
How much does debt factoring cost?
At BCashflow Positive, we pride ourselves on having a transparent fee structure. We are completely upfront about our fees from the very beginning, ensuring there are no surprises. Our fee is 1.8% for the first 30 days and then 0.06% for each day after that, for up to 90 days. Give our fee & funding calculator a try now.
Improve your business cash flow with debt factoring today
Call us on 1300 937 292 or fill out our quick contact form and we will be in touch in 1 hour.
Australian Factoring Company – Funding You Faster With Electronic DocumentsMay 04 2018 in Invoice Factoring
For years now, our aim here at BCashflow Positive has been to support local Australian businesses by helping them to access cash flow ahead of time. This has allowed our customers to seize opportunities and grow at rates they would otherwise be unable to achieve. As a leading Australian factoring company we are constantly looking at ways to get funds to our customers faster. A thorn in our side has been the slow set up and settlement process, mainly caused by postal delays. Well, not anymore.
Australian Factoring Company – Using DocuSign to speed up our processes
We have taken a bold move to adopt new digital documents, which has allowed us to help serve our clients faster than ever before. By utilising DocuSign technology, we can fast-track the entire document setup and settlement process. Instead of taking up to 10 days, we can now complete settlement in as little as 48 hours. But how exactly? The typical setup and settlement process previously starts with us drawing up the necessary documents and then posting them to our clients. With standard delivery times and possible delays, we find this can take between 3 and 5 days. The client then needs to read, approve, sign and return the documents. Again, this adds an extra 3 to 5 days to the process. However, by using DocuSign, we can immediately send the necessary documents to our clients online. Then, once they have approved them, they can electronically sign them and send them back to us. By removing the entire delivery process, the only thing standing in the way of our clients and their funds is the time it takes for our solicitors to draw up the documents and for the client to read them.
How safe is DocuSign?
Protecting sensitive data and meeting strict industry regulations is of the utmost importance to us. We would never want sensitive information to fall into the wrong hands and have always taken suitable steps to mitigate any such risks. In fact, by adopting DocuSign technology, we are able to make our processes even safer. Here’s how: Whenever a document is sent through DocuSign, they ensure that all data contained is fully encrypted. In fact, they are able to meet the very strictest regulations by utilising the best data encryption technology that is currently available. What this means is that using DocuSign to transfer and sign files is far safer than sending them the old-fashioned way. Human error and chances of documents going missing are reduced. Instead, they are only ever shared between our company and the clients we work with. This allows us to ensure complete client confidentiality and give total peace of mind.
How does a factoring company work exactly?
If working with an Australian factoring company is something you have been considering, then here is how the process works with BCashflow Positive.
- Simply invoice your clients as usual and send us copies of invoices you would like funded.
- We will credit your account with up to 90% of the invoice value in as quick as 4 hours.
- The remaining 10% is made available once your client pays us.
The benefits of working with Australia’s leading factoring company
By choosing to work with a reliable Australian factoring company, businesses can access a whole host of benefits, including the following:
- Gaining access to invoice funds in as little as 4 hours.
- An incredibly fast 48 hours approval process
- Fast account set up and settlement process.
- Having access to key decision makers.
- Being able to cover the gap of slow payments.
- No need for property security or quarterly audits.
- Having the freedom to choose which invoices you want funded.
Get started today
As mentioned, our primary mission is to help support an increasing number of Australian business owners in their attempts to scale and grow their companies. To do so, we offer a swift and easy way of accessing funds, which is now more secure than what is being offered by our competitors. Better yet, getting started is very easy. Simply contact our team and explain your needs. Then, we can see if we are the right fit for you and get the process moving. We will also be happy to answer any other questions you might have.
Have you considered factor finance to get on top of BAS payments?Apr 10 2018 in Invoice Factoring
As a business registered for GST, you will need to submit a business activity statement (BAS) to the Australian Tax Office every quarter. The next BAS is due on 28-April-2018. When this time comes, many businesses can worry about whether they will have the finances to pay for their BAS. BAS includes GST, pay as you go (PAYG) instalments and other taxes, and if you don’t have the money put aside for BAS when the time comes, it can give you and your business a headache. This time can often put a strain on your business – but it doesn’t need to. If you have a good factoring company behind you to provide your business with factor finance, you can take away a lot of the stress at BAS time.
How does factor finance work?
Factor finance allows a business to get a percentage of their sales invoices paid to them immediately, instead of waiting up to 90 days for their customers to pay. At BCashflow Positive getting paid for your invoices can be done in 3 simple steps:
- Invoice your customer for goods fully delivered and services fully completed, and send BCashflow Positive a copy.
- BCashflow Positive will verify the invoice with your customer before releasing up to 90% of the invoice value in as quick as 4 hours.
- The remaining 10% of the invoice value is transferred to you once your customer pays, less any accrued fees.
How much does factor finance cost?
The price of factor finance varies between different factoring companies. For us, we charge 1.8% for the first 30 days, and then 0.06% per day thereafter for up to 90 days. We are transparent about fees from the start. Give our fee and funding calculator a go and see how much funding you can get and exactly how much it is going to cost.
Benefits of BCashflow Positive factor finance
Factor finance can have many benefits, mainly to get faster cash into your bank account. You can use the money to buy more products, expand your business, or to get on top of your BAS payments. Unlike with traditional bank finance, the approvals process for factor finance can be as quick as 24 hours, allowing you to capitalise on opportunities more quickly. Factor finance may also be a good option when you are unable to qualify for traditional bank finance due to a limited trading history, or lack of personal assets. Factor finance focuses more on the strength and spread of your ledger as opposed to director’s asset backing or business assets. Funding is also more align with your business growth and the more sales you make the more cash you can get. Another one of the many benefits of factor finance is that it takes away the stress of having to chase your customers to pay their invoices on time – BCashflow Positive will follow up payments with your customers on your behalf as part of our service. This can drastically cut down on your administrative costs while also saving you and your business money.
Who does BCashflow Positive factor finance suit?
BCashflow Positive factor finance is great for SMEs with a high level of customers on accounts where payments of invoices can take as long as 90 days. Industries that widely use factor finance includes recruitment and labour hire, manufacturing and wholesale, IT and business services, earthmoving and mining, and transport and logistics. If you are looking for additional working capital to grow your business, or simply want to close the gap of slow payments so you can get on top of BAS commitments – give us a call on 1300 937 292.
Don’t use the equity in your home to keep your business open – Use debtor financingMar 18 2018 in Debtor Finance
Small businesses are being forced to take loans using the equity in their home in order to keep their business afloat. Loans taken out against property are used to pay wages, sustain cash flow and keep businesses operating. But this can put a huge strain on the business owners and put them at serious risk of losing everything. When you take a loan out against your house then you risk losing your home if your business fails.
Equity drawings from residential properties for business purposes have increased by over 50% over the past 6 years. This is putting properties in the firing line and business owners at risk of losing it all. Instead of using equity loans there is another option, debtor financing. Debtor financing can be used to improve your business cash flow without needing to draw equity from your home.
What is debtor financing?
Debtor financing uses the amount of money owed to a company as collateral. It allows you to turn your accounts receivable into cash. Effectively this form of finance allows you to access funds that are not yet available to you because they have not yet been paid. This is great for maintaining a constant cash flow as you can access this cash sooner, allowing you to repay it when your client pays.
Typically, you can get up to 90% of the invoice value within 24 hours, allowing you to overcome your cash flow problems quickly and easily.
How does debtor financing work?
Debtor financing is a means of funding small and growing businesses that need working capital so that they can operate. It allows you to finance against slow paying invoices and help you to overcome cash flow problems by following 3 simple steps:
1) Invoice your clients for sales of goods or services and send BCashflow Positive a copy.
2) BCashflow Positive will verify with your client that the goods have been delivered, or services have been fully rendered, before releasing up to 90% of the invoice value.
3) The remaining 10% is provided to you once your client pays us, less any accrued fees.
How do I qualify for debtor financing?
Debtor financing is suitable for small to medium businesses with a high level of customers on accounts and has a monthly turnover of $200,000 to $3,000,000.
How much does debtor financing cost?
At BCashflow Positive we are transparent about fees so that you will know how much it is going to cost from the outset. Debtor financing costs will vary depending on the invoice amount and how long it will take for your client to pay the invoice. For example, on an invoice of $200,000 which is paid 30 days after it was funded will incur a fee of 1.8%. Give our fee and funding calculator a go to work out how much funding you can get and how much it is going to cost.
What are the benefits of debtor financing?
Debtor financing allows you to solve your cash flow problems by releasing immediate cash from your receivables. These problems could otherwise lead to your business being unable to operate and this can ultimately cost you your business. Debtor financing does not require real estate collateral either, which means that you do not need to use the equity in your home to pay for your business operating costs.
Apply for debtor financing with BCashflow Positive is quick and simple. Our online application takes 3 minutes to complete and a response is provided within 24 to 48 hours. Unlike traditional business loans, or loans to draw equity from your home, which can take weeks to months to get a response.
Pros And Cons Of Factoring FinanceFeb 01 2018 in Invoice Factoring
Are you suffering from cash flow problems? Many successful businesses still face periods when their outgoings and income aren’t quite in sync. Over time, the imbalance usually sorts itself out, but on a week-by-week, month-by-month basis, a late invoice, unexpected bill or a need to buy additional materials can see your bank balance plummet.
If you’re worried about meeting day-to-day expenses such as wages, material purchases and vehicle overheads, factoring finance could be a solution. Providing you with an advance on invoices owed, factoring finance provides a rapid cash injection that can tide you over until your cash flow is on a more secure footing.
The advantages of factoring finance
For many businesses, factoring finance is ideal as a short-term borrowing measure. The process doesn’t require a complicated application process and isn’t dependent on standard indicators of business worth such as asset value. You keep control of which invoices you wish to factor and your relationship with your customers remains unaffected.
Quick to organise, your money can often be paid into your bank account within 24 hours – an excellent idea if you’ve got urgent expenses to meet which really can’t wait. The length of time you can borrow for varies from a few days to a few months. The shorter the borrowing period, the less interest you pay.
Factoring finance gives you flexibility – you can choose which invoices and clients you want to draw funds from. Another benefit is that the process has no effect on your customers – they pay in the same way and the only difference is that they pay us for your invoices rather than you.
If you are a business that tends to have a number of outstanding invoices at any one time, factoring finance could work really well for you.
Are there any problems with factoring finance?
If you haven’t used factoring before, it is wise to do your research to determine whether factoring finance is right for you. There may be hidden costs and terms depending on which company you partner with.
How much does factoring finance cost?
BCashflow Positive is transparent about our fees so there are no surprises. We charge 1.8% for the first 30 days and 0.06% daily thereafter for up to 90 days. To find out how much funding you can get and how much it is going to cost, give our pricing calculator a go now.
Who should you turn to for factoring finance?
BCashflow Positive has more than two decades of experience in providing clients with easy and fast access to the cash they need. We make the lending decisions, so there are no middlemen involved – you work directly with us.
Our aim is always to make business lending as accessible, straight-forward and fast as possible, offering transparent, cost-effective lending options to many different types of company. From mining to manufacturing, recruitment, services industries, hospitality concerns and more, if you need business cash quickly, factoring finance from BCashflow Positive could be what you’re looking for.
Call 1300 937 292 to speak to a factoring finance expert today.
What Is Invoice Finance?Nov 29 2017 in Invoice Finance
Definition of invoice finance
Invoice finance allows you to unlock immediate cash from your sales invoices instead of waiting up to 90 days for your clients to pay. Similar to a line of credit secured by your accounts receivable, you can convert your invoices into cash in as quick as 24 hours.
How does invoice finance work with BCashflow Positive?
1. Invoice your clients for the sale of goods or services and send BCashflow Positive a copy.
2. BCashflow Positive will credit your account with up to 90% of the invoice value in as quick as 24 hours.
3. Receive the remaining 10% less any accrued fees, when your client pays us.
What are the benefits of invoice finance for my business?
• With invoice finance, you can unlock cash tied up in your unpaid invoices in as quick as 24 hours.
• Improve your business cash flow allowing you to accelerate growth.
• Cover the gap of slow payments – Don’t wait up to 90 days for payment.
• Funding can increase as your business grows – The more sales you make, the more cash you can get.
• There is no property security or quarterly audits required with BCashflow Positive invoice finance facility.
• Fast 48 hours approval with BCashflow Positive– Not weeks like the banks.
• Spend more time growing your business and leave the follow up of accounts to BCashflow Positive.
How much does invoice finance cost with BCashflow Positive?
At BCashflow Positive we are transparent about fees so there are no surprises.
We charge 1.8% for the first 30 days & 0.06% per day thereafter for up to 90 days.
As an example, if you invoice finance $200,000 in accounts receivable you can receive up to $180,000 in as quick as 24 hours. If the $200,000 were paid after 30 days, the total cost incurred would be $3,600 or 1.8%. Give our fee and funding calculator a go to see how much funding you can get and how much it is going to cost.
Why BCashflow Positive Invoice Finance?
Ready to unlock growth by unlocking cash from your sales invoice? Contact BCashflow Positive on 1300 937 292 today to find out more or apply online today by completing our 3 minutes pre-approval form and get a response within 48 hours.
As Australia’s leading invoice finance company with over 27 years experience, your business is in good hands.
Beware Of Flex CommissionOct 25 2017 in Debtor Finance
When it comes to choosing a finance broker for your business, it’s important to consider what incentives they are getting as part of the transaction. Good finance brokers are like trusted advisers to their clients, where they have taken the position of the traditional bank managers of 20 years ago. Some brokers might be swayed and not necessarily have their client’s best interest at heart, particularly where flex commission can be applied.
What is flex commission?
So, what is a flex commission system and why is it so important to be cautious of finance brokers who might be involved in one? In the most basic terms, a flex commission is where the amount of commission is dependent on the interest rate charged to the consumer. The higher the rate, the more brokers can make.
The new legislation from the Australian Securities and Investments Commission to be introduced in November 2018, prohibits lenders from entering into agreements where the benefits paid to a broker are determined by the interest rate, and the broker can set or influence the rate. The instrument will also place controls on fees charged by brokers, which are designed to stop brokers from increasing their fees and charges to make up for any loss resulting from the ban on flex commission. The ban will apply to all regulated credit contracts and consumer leases, excluding home loans.
Although there are new laws being introduced that aim to halt this practice, as things stand, flex commissioning is still a very real issue that needs to be considered carefully by you or your company before choosing a finance broker.
Reliable debtor factoring company
Whilst we do pay brokers incentives here at BCashflow Positive, we certainly do not enter into any agreements where there is flex commission involved. We also don’t take brokers on fancy holidays to try and sweeten the deal. Our core focus is providing flexible and transparent debtor factoring to Australian businesses by unlocking cash from their sales invoices.
How does debtor factoring work?
BCashflow Positive’s debtor factoring facility can provide immediate working capital for your business by unlocking the cash tied up in your sales invoices. Getting your invoices paid within 24 hours is as easy as 1 2 3:
1. Invoice your clients for the sale of goods or services and send BCashflow Positive a copy.
2. BCashflow Positive will then transfer up to 90% of the invoice value to your nominated account within 24 hours.
3. The remaining 10% is credited to you once your client pays, less any accrued fees.
How much does debtor factoring cost?
We are transparent about fees from the start, so there are no surprises. We charge 1.8% for the first 30 days and 0.06% per day thereafter for up to 90 days. Give our online fee and funding calculator a go now.
Who does debtor factoring suit?
Companies with a high level of customers on accounts with a monthly turnover of $200,000 will benefit from using a debtor factoring service. Rapidly growing companies or newly established companies can also benefit from using debtor factoring to convert their sales invoices into immediate working capital.
Don’t wait up to 90 days for your clients to pay, unlock growth by unlocking cash from your accounts receivable.
Call 1300 937 292 to speak to a debtor factoring expert today.
Nothing Costs NothingOct 03 2017 in Invoice Factoring
If you’ve had your eye on the factoring industry, you might have noticed that there are now some companies out there claiming to offer free debtor insurance. Although on the surface, this might seem like the perfect solution for your cash flow problems, it’s worth remembering that there are some things that are just too good to be true. As Terry Benedict said in one of our favourite scenes in Ocean’s Twelve, “Nothing? Who do you think you are dealing with? Nothing costs nothing!”. In the world of finance, it is critical to read the fine print before diving in.
Read the fine print
It’s well worth educating yourself, then, on exactly what debtor insurance is and the advantages and disadvantages of debtor insurance. Debtor insurance is also known as credit risk insurance and is designed to protect businesses from the risk of late payment or non-payment from their customers.
Debtor insurance comes in different formats, but the common factor is that it covers risks which must be considered within the control of the buyer rather than the business. Examples of such risks might be buyer bankruptcy or inability to pay, pre-credit risk, customers refusing to pay up (protracted payment), or the buyer refusing or being unable to take delivery of the goods they have ordered. Whether your insurance policy covers some or all of these risks will depend on the specifications of your particular contract, so it’s important to read the policies of the company you choose very carefully.
Indeed, there are often crucial parts of the terms and conditions of any contract that will reveal definite disadvantages when it comes to choosing a particular debtor insurance product. Often, only certain types or groups of customers will be covered in regards to commercial risk factors. This means that businesses can end up losing out significantly, and find themselves in a situation where the insurance they have purchased doesn’t even cover the losses suffered. Examples of such accounts that might not be covered include foreign customers or those in complex financial situations.
There are also a variety of other complications that might come with debtor insurance including the requirement to provide detailed customer reports to meet specific conditions of the insurance company. This is before you consider unexpected legal costs that might suddenly materialise when it comes to making a claim. So you might want to think twice about taking up factoring with a company that offers free debtor insurance, unless you know exactly what you are covered for and whether you will be out of pocket in the end.
Reliable factoring company with transparent fees
With BCashflow Positive, none of the complexity above will apply, as we don’t claim to offer free debtor insurance nor do we believe our clients need it. Our 27 years factoring experience will ensure your business is in good hands. We are also completely transparent in regard to fees, so there won’t be any nasty surprises later on. Give our pricing calculator a go to work out how much funding your business can get and how much it is going to cost up front.
How does a factoring company work?
Don’t wait up to 90 days for your customers to pay. Partner up with a factoring company and improve your cash flow by converting your sales invoices into cash. Getting paid within 24 hours is as easy as 1 2 3
- Invoice your client and send us a copy
- We advance you with up to 80% of the invoice value
- The remaining 20% is credited to you once your client pays us, less any accrued fees.
Partnering up with a factoring company today by calling 1300 937 292 now!
Image Source:“Ocean’s Eleven” Seen here from left, Andy Garcia (as Terry Benedict) and Matt Damon (as Linus Caldwell). Screen capture. Copyright © 2001 Warner Bros. Credit: © 2001 Warner Bros. / Courtesy: Pyxurz