Invoice Financing Australia

How does invoice financing work?

For many businesses, every solution presented usually means more administrative and leg work for the business that costs them valuable time. That’s not the case with Key Factors’ invoice financing. We have simplified the process of getting funds quickly for your business and ensuring you get the money in your account in as little as 4 hours by following several steps.

First, only businesses that issue invoices to their clients on credit terms are eligible for financing. The process starts with your business delivering services or products for a client as you normally would. Once the work is complete, you send an invoice to your client and wait for them to pay it.

If you need the money faster than the client can pay you or you have an increasing number of unpaid invoices, you can supply us with copies of your invoices.

We will vet the invoices provided to ensure they are legitimate and that you have delivered the said services or products. We will also assess your customer’s risk factor. Once we approve the invoice, we will send you up to 80% of the value of the invoice less our fee within 4 hours.

There are no strings attached to the money received. You can use it to expand your business, for new equipment, or to make payroll.

Besides providing your business with running cash, after the client pays the full invoice, we send you the balance net of any additional fee days.  

It’s a quick and easy way for your business to get running capital and keep on top of cash flow.

Why Do Businesses Use Invoice Financing?

Several factors can play a role in a business’s decision to use invoice financing. However, there are some common reasons why a business might consider using an invoice financing company like Key Factors.

Additional cash flow for business growth

The growth of a business largely relies on positive cash flow. The business needs regular injection of capital to increase inventory and expand the workforce. If your business has most of its money tied up in unpaid invoices, using an invoice financing company can free up most of the money within a short time and give you the cash flow you need to take your business to the next level.

Bridge the gap of slow payments

Making payroll is every business’s ultimate goal. Even though the business might be making a profit, not having ready cash can affect payroll and prevent you from paying your employees and suppliers on time. When the bills start piling up, they can weigh heavily on the business and affect employee morale.

Invoice financing can help you bridge the gap by giving you access to cash without taking out expensive loans that will only add to the business’s debt.

Meet operating expenses

You can also consider taking an invoice financing service if you struggle to meet your operating expenses because of many unpaid invoices. This is common among new and small businesses that don’t have the comfort of a large bank account balance that they can use as they wait for clients to clear their invoices.

Benefits of financing invoices for business

Invoice financing is becoming increasingly popular among businesses for its numerous benefits, such as:

You get approved for funding quickly

Most of the alternative funding methods of businesses have lengthy applications and long waiting periods before funding is approved. It can be weeks or months before getting any approval.

With invoice financing, everything moves much faster. With Key Factors, you can get money paid in hours. This makes it preferable for businesses that want to get a quick cash injection without waiting weeks to get approved.

With financing, you have full autonomy of how you use the funds you get from Key Factors. That means you can also use the funds to meet your ATO obligations on time, to stay in their good books and avoid hefty fines for late tax remittance.

You don’t need perfect credit

Unlike banks and other lending institutions, your credit score is not a factor when getting approved for financing. The financing company will primarily determine their credit approval based on your customers’ credit and payment history. This is because the company purchases an invoice that your customer will pay.

Because your credit history is not a major factor, it makes it easier for newer and smaller businesses that haven’t built up a pristine credit history to get funding. Even more importantly, businesses can use invoice financing as a tool to build their credit history.

Obtain funding without debt

Taking on debt for a business is always a double-edged sword that could have more downsides than benefits. Over time, the debt can accumulate and eventually harm your business and credit score.

Financing is not a loan, so your business is not taking on any debt. It’s a leverage where you get money for your unpaid invoices, so you don’t have to pay the money back. We make money by charging you a small and transparent fee for each transaction we facilitate. By partnering with us, you can stop financing at any point because we don’t lock you in contracts, and you don’t have any long-term debts at the end of the partnership.

You don’t need to put up any collateral

Traditional loans have many contingencies to protect banks from making losses. The interest rate you get on the loan depends on many things, like how long you have been in business, your credit history and the type of business assets you can put up as security. Once the loan is approved, you pay interest on it, whether you are using it or not, for the entire loan period.

With financing, the fees can be structured differently and, in many cases, only apply to the second part of the payment after the invoice has been paid by the customer. Financing companies have different ways of structuring their fees. But at Key Factors, we only charge you a small percentage of every invoice, ensuring that you only pay for the invoices you send us and nothing more.

This makes financing a more efficient and flexible cash-generation method that is more cost-effective for the business.

The credit line grows with your business

Traditional loans give you a lump sum of money, which, for some businesses, makes sense. As you continue to grow, increasing the amount of the loan can be difficult as banks tend to protect their bottom line and risk exposure.

But invoice financing can grow with your business. As long as you’re working with customers, we can approve for a higher credit limit. The more customers you work with, the better your chances of a higher credit limit. Your business can grow faster and more easily with financing than a traditional loan.

Financing can help you improve your business credit

Invoice financing is vastly different from loans and has no direct impact on your credit. However, you can use it to improve your credit history by using the funds to pay loans, suppliers, employees and other business bills on time.

Improving your cash flow with invoice financing can help you build stronger relationships with vendors by paying on time and possibly making larger orders. By strengthening your financial position, you make it easier to obtain other types of funding in the future. 

You maintain autonomy with the funds

Getting timely and predictable invoice payments gives you more flexibility for your business. You can use the funds you receive to invest in equipment, for marketing, or however you choose. Financing allows you to use the funding for any business-related expenses. You can’t say the same for loans, which are only limited to certain specific uses, making it harder for business owners to adjust their needs with the funds they have.

You acquire reliable customers

Part of the financing process is that we research your clients and make sure they’re creditworthy. By extension, this helps you identify the clients you want to build long-term relationships with based on their credibility. It potentially saves you from the stress of having clients who don’t pay on time or completely fail to honour their invoices.

The benefits of working with an invoice financing company are multi-faceted and present the business with many opportunities besides getting cash within a short time to maintain a positive cash flow.

Why We Are the Leading Invoice Financing Company in Australia?

Getting the best experience and maximising the benefits of invoice financing depends on whether you choose the right financing company to work with. At Key Factors, we’ve been around since 1989, providing businesses with the cash flexibility they need to survive and thrive. Along the way, we’ve adjusted to ensure we provide relevant services to our clients and the friendliest business environment.

Here are a few more reasons why we are the leading invoice financing business in Australia;

No hidden fees

Invoice financing can often come with numerous fees, depending on the company you work with. Some companies will add a monthly admin fee, an annual fee or early exit penalties. Most of these fees catch the business by surprise because they only get to find out about them after onboarding.

At Key Factors, our pricing model is transparent and with no surprises. We use a basic percentage-based fee model that makes it easy for businesses to calculate our fee before they even begin business with us. The financing fee is clearly indicated on our websites for transparency, and we also offer to provide businesses with a quote when they call us.

Pay as you use

In addition to our favourable rates, we also offer favourable payment terms. Most financing companies will charge you a monthly or annual admin fee and have an exit penalty in place. But at Key Factors, you only pay for what you use. There are no monthly or yearly admin fees and no early exit penalties. These fees can be exorbitant, eating into your business’s profit, so not having them means you get more when you work with us, and you can stop using the service at any time.

Fast Funding

Key Factors provides funds on verified invoices in as little as 4 hours. Enabling cash-strapped businesses to get funding when needed without waiting for days, weeks or months to get the paperwork approved.

Flexible funding

We provide businesses with flexible funding with no strings attached. We don’t have any lock-in contracts, quarterly audits or requirements for property security. You get a completely flexible pay-as-you-go service, and you can stop anytime.

In addition, businesses are faced with bureaucracies and endless requirements when sourcing for funding, and above this, they still need to provide collateral for the funding. At Key Factors, we have no requirements to finance your invoices. We just need to verify the invoices are real and assess the customer’s financial risk. Having no requirements means we can process payments faster, and you can get the money you need for your business sooner. It’s fast and easy!

Experience just how easy it is to implement invoice financing or factoring, to help improve your business cash flow, pay your suppliers and employees on time, and have money to reinvest in your business to help it grow. Don’t get into strife waiting for your customers to pay their balances in full, stay on the front foot each month, and talk to our dedicated Key Factors team about our range of services including invoice funding. To find out more and see why we are one of the leading invoice factoring companies around Australia, call us today 1300 884 100.