Invoice factoring

Factoring is an alternative to a bank overdraft. It offers working capital for your business based on releasing vital cash flow which is tied up in unpaid invoices and outstanding debtors.
 
For many smaller and growing businesses, the debtor's book is the most valuable asset. If your customers are other businesses, factoring can often provide your business with the capital it needs based on your debtors book.
 
Factoring is a method of releasing the money tied up in book debts, thus substantially replacing credit sales with cash sales. The facility includes professional debtor administration, as well as collection and credit management.
 
Consider factoring as a way to finance your sales. If your sales go up, the amount of your financing automatically goes up. Cash flow crunches can be avoided and you don't have to worry about slow-paying customers.

1.      Full Factoring

This is the standard service offered and comprises the following:

• total management of the debtors ledger, including the provision of monthly debtor statements, computer reports to customers showing the state of the ledger. GST reports and debtor collections, trial balances etc.;
• investigations of credit-worthiness of prospective and existing debtors;
• up to 75% advance of the debtors book ( sometimes more);
• the facility is disclosed to the customer’s debtor;

This facility is suited to the small to medium size in need of debtor administration as well as finance.

2.      Invoice Discounting/Selective Invoicing Discounting

Invoice Discounting/Selective Invoice Discounting is an agreed service between the financier and the customer whereby:

• the entire debtors’ ledger need not be factored (depending on the customer’s cash flow);
• only agreed debtors’ invoices are factored following the usual 75% advance criteria;
• the service may be disclosed or “confidential”.

This facility allows the customer the flexibility to select either specific invoices, specific debtors or a variation within his debtors or invoices.

3.      Trade Finance

The complete “cash out to cash in” solution. This enables businesses to increase their working capital by funding the complete operation cycle – provides cash payment or letters of credit to local and foreign suppliers.

Process:

·         You receive an order.

·         The financier pays your supplier or open a letter of credit.

·         You deliver the goods and Invoice your customer.

·         You provide the financier with the Invoice and proof of delivery.

·         The financier discount your Invoice and pay you 75% (less fees and amount paid to the supplier).

·         On due date your client pays the financier directly.

·         The balance gets paid to you.

The most important aspects here are an irrevocable order from your client and a Pro-forma Invoice for goods delivered.

4.      Supplier Chain Finance (Reverse Factoring)

Apply for Bridging Finance quickly and easily using our confidential and secure online application form.