Thinking about Pursuing Invoice/Debtor Factoring in Sydney? Here’s What You Need to Know about Cash Flow Finance
If your business sells most items on credit and often has cash flow issues due to slow invoice payments, then you might consider cash flow finance in Sydney. Cash flow finance is also known as invoice finance, debtor finance or factoring, and you will hear these terms used interchangeably if you decide to consider or pursue this financing model. But is factoring the right choice for your business? Read on to learn more about this unique type of financial service.
Cash Flow Financing: Frequently Asked Questions
At Nova Business Finance, we offer debtor finance services in Sydney. If your business sells goods or services on credit, has unpaid invoices in accounts receivable and needs cash now, we can probably assist you. To help you understand exactly how factoring works, though, we’ve tried to answer some of the most common questions about it below.
What does factoring mean?
The term ‘factoring’ refers to the party that provides funding in an invoice finance situation. Say you come to Nova Business Finance for invoice finance in Sydney. In such a situation, there would be three parties involved in the transaction: the owner (you); the customer (your client); and the factor (us). You, the owner, sell the rights of your invoice or account receivables to us. We provide you with immediate or near-immediate access to cash. It is then our job to collect payment on the original invoice from your client(s).
How much money do I get for selling my account receivables?
If you decide to pursue a cash advance in Sydney, then you are essentially deciding that getting quick access to cash is your top priority. In most factoring transactions, you will not get the full amount billed on the original invoice. Instead, the factor (Nova Business Finance) will pay you a considerable percentage of the invoice. You will negotiate this amount on a per-transaction basis, but can be up to 80%. We hold the remaining funds in reserve until we collect the full amount of the invoice from your client. Finally, we return the reserve funds to you, minus a reasonable fee for our services. You do not have to make any repayments to us as you would for a loan, nor do you have to pay interest.
How long does it take to get money through Nova Business Finance?
In most cases, if you qualify for debtor finance in Sydney, we can turn your invoices into cash within 24 or 48 hours. That’s a much faster turnaround than you will see from most clients or any traditional banking institution.
Find out If Your Business Qualifies for Invoice Finance in Sydney
Are you interested in applying for cash flow finance in Sydney? If so, click here to get started. If you have accounts receivable for goods or services already rendered, then those invoices are your property and can be used as a security to obtain working capital. In other words, if you have outstanding invoices and need cash, you are probably eligible for factoring. Call Nova Business Finance on 1300 138 186 to ask any additional questions.