Unpacking 5 Common Myths About Invoice Factoring

By Jasmina Mujkic - Aug 24 2021

Invoice factoring can be a key strategy to ensure there is sufficient cash flow in your business.  It keeps money moving through your organisation, so you can pay your employees, manage your ATO obligations, increase your inventory, launch a marketing campaign, and more. During the pandemic, invoice factoring can help businesses pivot their operations, but it’s not reserved for tough times alone. Invoice factoring can be an effective way to improve cash flow and enhance your business operations.

Unfortunately, there are still a lot of companies in Australia that aren’t taking advantage of invoice factoring because of some common myths.  Let’s unpack those and get to the bottom of what invoice factoring is and what it isn’t – and how you can use it to help improve your cash flow.

Myth #1: It’s All or Nothing – You Have to Factor All Your Invoices

Reality: You can factor as many invoices as you like with no minimum monthly factoring volume. At Key Factors, you have the flexibility to choose what invoices you want to be funded and only pay for what you’ve used. Our invoice factoring facility doesn’t cost you anything if you don’t use it.  Eligible invoices include those relating to business-to-business transactions for goods delivered or work completed that is still within trading terms.

You might want to factor only some invoices to improve your cash flow after a recent stock purchase, or you could factor invoices ongoing to cover the slow payments gap and have a more consistent cash flow.

Myth #2: Invoice Factoring is a Last-Resort Finance Option

Reality: Invoice factoring is a great finance option during challenging times and when your business is thriving because it gives you immediate access to the cash you have already earned. Cash is king in business, and cash flow management is critical to whether a business succeeds or fails.  Key Factors invoice factoring allows you to manage your cash flow more efficiently by giving you the flexibility to convert your invoices into cash when you need it.  

Instead of waiting 30, 60, or even 90 days for your clients to pay their invoices, you can receive your money right away in 3 simple steps:

  1. Invoice your clients, and send Key Factors copies of invoices you want to be funded.
  2. Key Factors will credit your account with up to 80% of the invoice value, in as quick as 4 hours.
  3. We will transfer you the remaining 20%, less any accrued fees, when your client pays us.

When business is tough, the boost in cash flow could be used towards paying your employees to avoid layoffs or to pivot your business. During the best of times, you can use funds from factoring your invoices to assist with attracting new clients, increase inventory, expand to a new office, or scale your business. The additional cash flow can also allow you to pay your bills on time avoiding late fees and penalties or to take advantage of bulk or early payment discounts with your suppliers. 

Myth #3: Access to Funds Can Take a Long Time

Reality: Key Factors approval and funding process is fast and efficient. 

Simply Apply: Call us on 1300 884 100 to speak to a cash flow expert who will guide you through the process and answer any queries you may have.

Review Approval: If your business qualifies, you’ll have approval within 24- 48 hours.

Document and Settlement: On settlement, our team will actively work with you to get your invoices funded in as quick as 4 hours. 

Access to funds can take a long time if your clients are slow in paying their invoices.  Don’t wait up to 90 days for your clients to pay and cover payment gaps with Key Factors invoice factoring.

Myth #4: Invoice Factoring is Not Flexible

Reality: At Key Factors, there are no minimum monthly factoring requirements or lock-in contracts. We’ve designed it that way because every business is different.  Our process is simple, transparent, and yes, flexible:

    • No minimum: We fund the invoices you choose when you need them. 
    • No lock-in contracts: You can use our facility for as long as you like, and it doesn’t cost you anything if you don’t use it.
    • No hidden fees: We are committed to transparency, so there are no surprises. You can work out how exactly much funding you can get and how much it is going to cost by using our fee and funding calculator.
    • No quarterly audits or shadow software: We trust you to run your business, and we’ll focus on what we do best: invoice factoring.

    Should your factoring demand change on the back of growth and a higher level of ongoing monthly facility usage, and you wish to take advantage of the cost savings of up to 40% with our BCashflow Positive product. We make that process easy for you via our initial documentation, so that there is no need to document facilities and incur additional fees to accommodate this request.

    Myth #5: All Invoice Factoring Companies Are the Same

    Reality: They’re all quite different.

    At Key Factors, we are putting the invoice factoring myths to rest by providing flexible and fast cash flow solutions to businesses all over Australia for 32 years.  

    • We allow our clients to factor invoices they choose and only pay for what they’ve used.  
    • Our invoice factoring service is instrumental to helping our clients grow their business and is not used as a last resort finance option. 
    • Our approval and funding process doesn’t take a long time, and our clients can get access to funding in as quick as 4 hours.
    • Our invoice factoring service is flexible with no lock-in contracts or quarterly audits. 

    With offices in Perth, Melbourne, Sydney, and Brisbane, we offer personalised invoice factoring for businesses with an annual sales turnover ranging from $500,000 to $30 Million.  We set ourselves apart from other factoring companies with transparent fees, fast and flexible funding with no lock-in contracts, and good old fashion customer service.

    Since we opened our doors in 1989, we have grown into one of the largest invoice factoring companies in Australia.  Contact us today to learn more about how invoice factoring can be a great finance strategy to help your business grow, not a last resort.


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