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Everything You Need to Know About Factoring Finance

July 25, 2017

factoring

When a business sells its accounts receivable – or invoices – to a third-party (a ‘factor’) it’s called ‘factoring’. The transaction results in immediate access to cash for the business from the factor, who then collects the payments owed to the business from their customers.

Factoring is an option that increases cash flow for businesses of all sizes and from all kinds of industries. Factoring is used to purchase inventory, new equipment, pay employees, get on top of ATO obligations, or expand organisational operations. It has many benefits for businesses that are looking to grow and make faster decisions when it comes to their expansion.

Advantages of factoring

Apart from providing quick access to cash that a business would otherwise have wait for up to 90 days for, factoring can make a significant difference to operational efficiency and customer relationships in the long term. Moreover, factors provide free management of accounts collections from a company’s customers – a task that can be stressful and time-consuming. As a result, more time can be spent on making more efficient use of resources and growing business.

Factoring can also be a quick solution to raise vital working capital for growing companies going through expansion.

Why you should trust Key Factors for Factoring

At Key Factors, we use over 27 years of experience in the field to make sure your business is in good hands. We are an independently owned Australian company, with a well-built reputation when it comes to providing our customers with flexible factoring solutions.

Most importantly, we’re reliable. Our aim is to make sure that slow payments don’t limit your business’ potential. For that reason, you can count on us to give you up to 80% of the value of your invoices in as quick as 24 hours.

Key Factors has offices in Sydney, Melbourne and Perth. Whether you’re looking into factoring to improve cash flow or take full advantage of your business’ growth potential, our friendly staff are here to answer all your questions. Call us on 1300 884 100 and speak to cash flow expert today.

Enquire now

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What our customers are saying

  • We used Key Factors when our bankers didn’t want to know us in October 2011, as we operate in an industry that was going to be affected by the introduction of the carbon tax.

    Traditional lenders were unable to deal with the uncertainty and risks.

    Key Factors understood the risk and assisted us with our cash flow for 5 months, which was great.

    We are still keeping the facility in place just in case knowing that it’s costing us nothing to do so.

     

    - Financial Controller, Solar Manufacturing Company, WA
  • In today’s economy, many businesses are struggling to manage their cash flow and trying to avoid getting into the cycle of you’ll get paid when we get paid. As a small business owner, the best thing has to be getting the cash into our account as we issue invoices, without having to wait 30, 45, or sometimes 60 days to get paid. We have been long standing clients and are very happy with Key Factors service. Their facility is simple to use, and the staff are always helpful.

    - Director, Timber Recycling Company, SA
  • We run a charter business and our business is very seasonal.

    Key Factors smooths out the bumps in cash flow without the need of property security or minimum annual fees paid monthly.

     

    - Owner, Charter Flights Company, NT

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How does it work?

  • Invoice your clients for goods and services
  • Send a copy of your invoices to Key Factors
  • 80% of the invoice face value is made available to you within 24 hours, less a discount rate
  • The remaining 20% is provided when your customer pays, less any accrued charges
Apply now

FAQs

FAQs

How much does it cost?

We only charge a discount rate on what you use. There are no ongoing monthly charges or annual charges.

Do I need to factor all my invoices?

No, Key Factors flexibility means you are not required to submit all your invoices for funding.

What invoices can be considered for funding?

Invoices relating to business-to-business transactions can be considered, not consumer receivables. Invoices which are still within normal trading terms not... More info

More FAQs