What to Look for When Comparing Debtor Finance CompaniesFeb 26 2020 in Debtor Finance
Not all debtor finance companies are the same, and the one you choose can have a big impact on your business. Navigating the terms and fees can feel overwhelming, especially if you are unclear about how this process can help your business grow and thrive. It’s important to understand exactly how debtor finance works and what an invoice finance company can do for you.
Before you choose a company to partner with, let’s take a closer look at how debtor finance works and what to consider when choosing between debtor finance companies:
How debtor finance companies can help businesses
For new businesses, small businesses, rapidly growing businesses, and in fact for most businesses, cash flow can become a problem. One of the main causes of cash flow issues is slow payments. Small and medium businesses are losing access to as much as $7 billion a year because bigger companies are not paying their bills on time, according to a study conducted of more than 150,000 Australian businesses. The study also found a link between long payment times and slower growth for small businesses, with 46 per cent failing in their first five years.
Your business might have made 100 sales, but some customers can take 30, 60, or even 90 days to pay, so your cash is tied up in unpaid invoices. The lack of cash flow can also prevent your business from growing as you can’t fund the next production run or hire new employees to support the growth.
That’s where debtor finance companies can help by advancing funds against unpaid invoices, giving you immediate access to cash.
How debtor finance works?
Debtor finance companies help businesses to improve their cash flow by shortening their normal receivables cycle. Businesses can use their outstanding invoices to get immediate cash instead of waiting up to 90 days to get paid.
BCashflow Positive debtor finance is as easy as 1 2 3:
- You invoice your customers as usual for the goods and services they receive and send BCashflow Positive a copy.
- BCashflow Positive will credit your account with up to 90% of the invoice value, in as quick as 4 hours.
- Once the customer pays us, BCashflow Positive will credit your account the remaining 10% less any accrued fees.
Benefits of using debtor finance companies
Partnering up with a debtor finance company has many benefits:
Pay bills and operating costs on time, avoiding costly late fees and perhaps qualifying for discounts for early payments or large-quantity orders.
Grow your business by expanding your operations and hiring more staff.
Offer various payment terms to customers, which could increase sales for customers who need flexibility.
Avoid using personal assets to fund your business.
What to consider when choosing between debtor finance companies
After you have narrowed down a few debtor finance companies to consider, take a close look at their websites and call them to get a gauge of their service level and professionalism.
Below are key things you should also look for when comparing debtor finance companies:
How long have the debtor finance companies been in business?
Experience matters and staying power shows that a company is providing a service that is serving their customer’s needs.
BCashflow Positive has been serving Australian businesses for more than 30 years. From wholesale and manufacturing to recruitment, transport, mining, business services, and more, companies in Sydney, Brisbane, Perth, Melbourne, and beyond have relied on us to cover the gap created by slow payments to keep them in constant cash flow.
What fees do debtor finance companies charge?
This information should be clear and straightforward, and if you are having trouble determining how much the debtor finance company charge, they are probably not the best company to work with. Transparency is important since hidden fees can add up and hurt your bottom line.
At BCashflow Positive, we are upfront about our fees and there are no costly surprises. Our pricing structure is simple: we charge 1.8% for the first 30 days and 0.06% per day thereafter for up to 90 days. What does that add up to for you? You can use our calculator tool to find out.
How soon will your invoices be funded?
The whole purpose behind using debtor finance companies is to get your money quickly so you can get on with running your business. To that end, you should look for a company that can get your invoices funded fast.
BCashflow Positive can fund your invoices in as quick as 4 hours and will keep you updated throughout the process.
What is the process to get your invoices funded?
The process should be clear and simple; avoid debtor finance companies that try to make it more complicated than it has to be.
BCashflow Positive makes the process of getting your invoices funded straight forward. Simply send us copies of invoices you want to be funded. Our team will process your invoices and reach out to you should they have any questions. We fund the invoices in as quick as 4 hours and send you a report outlining what has been funded and any associated fees.
Why BCashflow Positive debtor finance?
In the end, choosing between debtor finance companies is simple when you focus on experience, transparency, and top-notch customer service. At BCashflow Positive, we pride ourselves on all three, and we have three decades worth of happy customers in a wide range of industries to back it up. We believe in close-knit working relationships, so you will be working with someone who will truly know your business and your story.
We love helping companies thrive, and we offer flexible customised solutions that allow you to take your business to the next level. A lack of cash flow is no reason for your business to struggle. Contact us today to learn more about how we can help your business. Or call 1300 937 292 to speak to one of our local cash flow experts.
EOFY 2019: BAS payments due, bills and more bills
As the end of this financial year is almost here, it shouldn’t be a surprise that your BAS statement is due again this 28 July. If you are a business registered for GST, you need to send your business activity statement (BAS) to the Australian Tax Office (ATO). You BAS helps you report GST, pay as you go (PAYG) instalments and other taxes.
ATO payments may become a stress point for your business, but there are simpler and better options other than the ‘Banks’ for helping you meet your ATO commitments. Traditionally, big banks won’t help or lend to small business especially if you have an ATO debt hanging over you.
At BCashflow Positive we specialise in assisting small businesses meet and manage cash flow needs like operating costs and ATO debt. Contacting us may make all the difference to your business cash flow by giving you access to your own funds currently locked up in your unpaid invoices/receivables.
Is Debtor Finance the same as a bank loan?
Debtor Finance is definitely a far cry for the traditional complex and over secured big bank business loan. The paperwork associated with Debtor Finance is simple and it won’t take weeks or months to get an answer.
The amount of cash you can access depends on your current receivables/unpaid invoice ledger, and not what a “back office” big bank credit manager may think they should give you.
Unlike the traditional big bank loans, BCashflow Positive does not take your personal assets and homes as security. You will be able to speak with the person that manages your account and is able to make decisions. The service level we provide will be a pleasant surprise.
Who benefits from Debtor Finance?
If you have outstanding invoices, Debtor Finance may be the answer you have been searching for.
At BCashflow Positive we are happy to look at all industry types so your business may be more than suitable. Some of the industries we have assisted include; Transport & Logistic, IT & Business Services, Earthmoving & Mining, Recruitment & Labour Hire, Manufacturing & Wholesale to name a few.
What are some of the many benefits of Debtor Finance?
The application and approval process is much faster than a bank loan. Instead of waiting weeks or possibly months for bank approval or your customer to pay, your business can access capital in as little as 4 hours once a facility is in place with BCashflow Positive.
Debtor Finance is a flexible alternative to finance business growth. It can cover the gap of slow payments and allows a business to get on top of ATO obligations. Businesses may also have the opportunity to take advantage of any supplier early payment discounts.
How does Debtor Finance work?
At BCashflow Positive you can turn your invoices into cash in three simple steps:
1.Invoice your clients for sales of goods or services.
2.Up to 90% of the invoice value is credited to you in as quick as 4 hours.
3.Receive the remainder less any accrued fees when your customer pays us.
Access funds from a leading Debtor Financing business
BCashflow Positive can work with small businesses experiencing tax difficulties. We can help your business access funding through your outstanding invoices. So take advantage of a debt factoring facility today by calling us on 1300 937 292 or complete our simple and quick contact form.
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 $100,000 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 $100,000 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.
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 $100,000 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.