In times where the economy slows and cash flow becomes a primary concern of small businesses factoring could offer a solution.
There is a factoring product available which provides businesses with an immediate cash injection by advancing up to 85% of the face value of an invoice assigned to it. The financing company then collects the debts. This not only frees up working capital for business to use when it is required, but also reduces the business expenses in many areas such as eliminating the cost of employing an additional person to handle accounts receivable.
Another area where costs can be reduced is through negotiating early payment discounts from suppliers once the business in a position to pay suppliers on COD or 7 day terms as a result of factoring.
Provided a business meets the financier’s criteria, a meeting can be arranged, the relevant documentation is collected and assuming the documentation is acceptable a letter of offer is issued within 24 to 48 hours.
If the business wishes to proceed, and accept the offer, an establishment fee of $990 inclusive of GST, is payable to allow the documentation to be prepared. This should take place within 48 hours of the offer being accepted.
The financier is then in a position to commence factoring the borrowers debtors.