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Factoring vs. FinTech Factoring

October 26, 2016

factoring

As technology evolve so does the world of finance. Financial Technology, also known as FinTech, relies on software to provide financial services. Factoring, one of the world’s oldest method of finance is also going online with lots of new FinTech factoring companies entering the market.

Businesses looking for ways to raise working capital can find it quite daunting navigating through this new market. By understanding the difference between a traditional factoring company and a FinTech factoring company, you will be able to make a more informed choice.

FinTech factoring company

FinTech Factoring is the new kid on the block and has also been called ‘peer to peer funding’ or even ‘crowd funding’ in that a business lodges invoices it has raised via an online portal or digital wallet with the FinTech, who then checks the authenticity of the invoices before exposing them to its suite of investors to see if there is an appetite to fund against said invoices. The FinTech does not fund in its own right.

Most often acceptable invoices/debtors pertain to large and well-known companies and each transaction is structured by a composition of collaterals depending on the stability of the business and its debtors. The charges incurred can vary from both invoice to invoice and debtor to debtor, a version of ‘Rate for Risk’. Non-payment of an account will still result in a recourse of the debt back to the business, plus payment of interest and charges to accommodate both the FinTech and the investor[s].

Businesses considering FinTech factoring should be mindful of the start up nature of most FinTech factoring companies and the longevity of these providers. FinTech factoring also rely more on technology and online platforms to provide funding, so there may be no staff or phone support.

Traditional factoring company

At Key Factors we believe in good old fashion service and operate under a traditional factoring model. Although we invest in technology to improve user experience, our offices are staffed with actual people who are always on hand to take your call.

Our staff play a major part in everything that we do. From the initial consultation, right through to the daily management of clients accounts.

We believe in building long-term partnerships by providing flexible and personable financial solutions. Our facility has no minimum volume requirement, no long-term contracts, and no on-going monthly charges.

With over 26 years of experience and offices in Sydney, Melbourne, and Perth, your business is in safe hands.

Call 1300 884 100 today to find out more.

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What our customers are saying

  • 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
  • Running a cleaning business and being very hands on, I don’t keep normal business hours. But with Key Factors I find I can always get a quick reply and they seem to always be there.

    • No call centres
    • No voice mail
    • No need to constantly explain myself to a new employee or account manager

    I always get an answer from those that answer the phones.

     

    - Director, Commercial Cleaning Company, NSW
  • 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

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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

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