Invoice Factoring Company Australia

Types of Invoice Finance

Like other financing methods, businesses are spoilt for choice when shopping around for invoice factoring partners. The industry has expanded vastly from when we first joined over 30 years ago and now features many more options. However, each company specialises in specific types of invoice factoring depending on their appetite for risk and industry.

It’s crucial for businesses to choose a company offering the right type of invoice financing because each method has its ups and downs, and the fees across the different methods also vary.

How Does Invoice Financing Work?

The invoice financing process involves three primary parties: your business, your customers and the invoice factoring company.

The process is simple and easy to understand. The factor buys your business’s outstanding invoices. They then verify that the invoices are legitimate and real. Once verified, the factor provides you with funds for the unpaid invoices. The cash provided with Key Factors is up to 80% of the value of the invoice, net of the factoring fee.

Once the invoice is paid by the customer, we send you the balance of the invoice to your account less any fee for excess days outstanding. We credit your account within 4 hours of verifying the invoices, ensuring your business gets the cash quickly.

Invoice financing primary focus is not on the credit rating of the business owner. Instead, we focus on the credit ratings of your customers. The service is available to businesses with low credit ratings and those looking to build their credit by paying their debts on time.

Why Do Business Finance Invoices?

Various factors inform a business’s decision to use invoice financing as a source of capital. Small companies and start-ups with limited capital consider this type of financing the most practical and ideal because it doesn’t plunge them into debt.

The main benefit of invoice financing is that it provides the business with immediate cash from tied-up unpaid invoices. Other reasons why businesses use invoice financing include;

For every business, cash flow is a huge factor in the smooth running of the business. But for businesses with slow-paying customers, this might be a challenge. But on the flip side, giving the customer long payment terms might spur long-term business relationships. Factoring helps you solve both problems immediately. You can continue giving your customers long payment terms but also avoid any cash flow hitches.

Some businesses can’t stand the traditional bank loan application process. It can take up to three months to get approved, not to mention the long list of requirements and documentation the bank needs before considering the loan. With invoice financing and factoring, a quick application process with some basic information mainly focused on your customers, and unpaid invoices can result in your facility being put in place giving your business ongoing access to the funds you need.

Debt Factoring Advantages

Besides the reasons mentioned above, there are benefits to invoice financing that businesses can’t find elsewhere with other funding methods. Although invoice financing can be considered a newer funding method, despite being around for several decades, it is revolutionary and often doesn’t involve the business taking more expensive debt that could compromise its balance sheets. An increasing number of businesses in Australia have been taking up this funding method for its unique benefits, which include the following;

Improves cash flow

With invoice financing, cash is received as soon as you finance the invoice. Giving you better control over the investment and growth decisions of the business. The regular and reliable freeing up of cash from unpaid invoices also makes business operations smoother, and any short-term financial issues can be smoothed over with this quick injection of cash, which sometimes enables the business to survive.

It’s a faster way to obtain financing

One of the factors traditional loans don’t address is the time-sensitive nature of business finances. Not having money at the right time can cost businesses massive opportunities and loss of clients.  With invoice financing, this challenge is fully addressed by ensuring your business gets the money within two days and with Key Factors, your account is credited within 4 hours.  This reduces the need for overdrafts or reliance on other invoice debtor finance facilities.

Accelerates growth

The money received from invoice financing can lead to the growth of the business if invested wisely.  It can be a vital tool in helping the business take advantage of opportunities that could help it grow, like landing larger orders and clients. Through this growth, the business also builds a strong customer base with more funds available and can eventually reduce its reliance on invoice financing. But overall, the business is always comfortable knowing there’s a solution to most of its short-term cash requirements to complete new orders or expand.

Why We Are The Leading Invoice Financing Company In Australia?

You can only enjoy the benefits of invoice financing if you partner with the right factoring company. At Key Factors, we’ve been helping Australian businesses grow for over 30 years through tailored invoice financing options for businesses of all shapes and sizes.  Here are a few reasons why you should consider us when looking for invoice financing:

Simple and transparent

Unlike many factoring companies, we keep our processes simple and transparent, including our fees. We have a simple percentage-based fee that you can easily calculate beforehand, and to make it even easier for you, we can provide you with a quote when you get in touch with us.  No monthly or annual admin fees or early exit penalties creep up without your knowledge.  We do everything above board.

High approval rate

We have a short list of requirements that most businesses easily meet to ensure we can help as many businesses as possible. We approve businesses with a short trading history, a less-than-perfect credit history and even some with ATO debt. Through our invoice financing, businesses have been able to rise from previous challenges, build their credit history and cover their ATO debts. A high approval rate means struggling businesses can get the financial help they need as long as they are in business and have unpaid invoices.

No real estate security

Many entrepreneurs are forced to use their homes or other business property to secure funding for their businesses. If you would rather not go down this road, Key Factors is the perfect partner for you. We don’t require your property as security, which reduces your risk exposure and allows you to maintain control over your assets.  We only use our outstanding customer invoices.

Pay as you use

Factoring companies may require you to enter into long-term contracts to maximise their bottom lines. While this might be beneficial for some businesses, it comes with the downside of steep early exit fines if the business no longer needs the service.

At Key Factors, we use a pay-as-you-use approach with selective factoring.  You decide how many invoices you want to finance and when you want to finance them. There are no lock-in contracts or admin fees involved.  We only charge a fee for the invoices you want us to finance.  You can opt out of the service anytime without additional costs. 

When Is It A Good Time To Use A Factoring Company?

Whether your business offers 30, 60, or 90 day payment terms, you may find that you have to do a fair bit of chasing in order to get paid. That money that comes in is all part of your cash flow, but if it is late or not there for months at a time, you cannot use it. All the while you still need to pay staff and suppliers, and that money has to come from somewhere. With invoice financing, you are able to release the cash you know is coming in, almost immediately, so you don’t have to be out of pocket. And the best thing about choosing Key Factors, is we not only offer fast and flexible invoice factoring in Australia, but we can provide our services with no lock in contacts, and only pay for what you use. Try the leading factoring company Australia-wide today and see why more business advisors recommend us.

How Can Invoice Factoring Help You?

Here at Key Factors, we understand just how important it is for customers to have a reliable factoring company in their corner, helping to reduce the risk of late payments or accruing further debt. Our dedicated team can help you to set up invoicing factoring, so you have a steady cash flow, with affordable rates and flexible terms. Best of all, you can spend more time growing or marketing your business, rather than chasing your debtors. You may see businesses that won’t consider invoice factoring, struggling to stay afloat, when the answer is so very simple. When you are looking for a factoring company Australia wide, call us on 1300 884 100, and we will be more than happy to talk you through it.