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.
Is Cash Flow Finance A Good Form Of Business Funding?Aug 31 2017 in Business Cash Flow
In an ideal world, customers would pay their bills the day that they were invoiced! There would never be disputes over payment and businesses would never have to wait months to be paid. Unfortunately, in the real world, problems over payment are a fact of life for many companies.
Whether clients are late in paying or it’s simply the case that a few larger projects are in the process of completion and it’s not yet time to invoice. There are many different circumstances when the cash needed to pay staff, purchase materials, or just to keep the power on, isn’t readily available. When there are issues with cash flow, a significant number of businesses turn to cash flow finance.
What is cash flow finance?
Cash flow finance is a fairly straightforward concept. A third party (such as us here at BCashflow Positive) advance you with up to 90% of the invoice value and deposit the cash into your bank account in as quick as 24 hours. BCashflow Positive then collect payment of that invoice on your behalf and credit the remainder 10% less any accrued fees when your client pays us.
With BCashflow Positive’s cash flow finance, you can choose which invoices you require funding for and know exactly how much it is going to cost. We are fully transparent about fees so there are no surprises. Give our pricing calculator a try now.
Why opt for cash flow finance?
The main advantage of cash flow finance is that it can be quickly arranged – a great solution if your financial situation has changed rapidly (for example, if a large invoice that’s due hasn’t been paid, or a job requires an unexpectedly large purchase of materials), compromising your cash flow.
You retain control over which invoices you hand over with BCashflow Positive cash flow finance, and is not in danger of over gearing as funding is based on a percentage of the invoice value. You are simply realizing an asset and bringing it forward.
Cash flow finance can often be the quickest financing option
When it comes to business success, your team and your reputation also play an important role. If your cash flow problems mean you may not be able to pay your staff on time or are going to default on bills, cash flow finance could be a timely solution.
BCashflow Positive cash flow finance online application takes 3 minutes to complete and a response is provided within 24 to 48 hours of receiving your application. Once your account is set up, you can get up to 90% of the invoice value deposited into your account as quick as 24 hours.
To find out more about the benefits of cash flow finance, call 1300 937 292 and we’ll be happy to help.