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 30 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.
Have you considered factoring to improve your business cash flow? It might be a faster and easier option than obtaining a business loan through your bank.
Here is how factoring works:
- You invoice your customers for goods or services.
- You send a copy of your invoice to a factor (like Key Factors).
- The factor then gives you up to 80% of the value of the invoice.
- The remaining 20% of the invoice is credited to you as soon as the customer pays, less any accrued fees.
How Can Factoring Help Your Business?
Many businesses have benefitted from using factoring to improve their cash flow. Some benefits include:
- Improve business cash flow
- Get on top of ATO obligations
- Pay wages on time and meet operating expenses
- Working capital for start ups
- Cover the gap of slow payments
Why Choose Key Factors for Factoring
Fast 48 hours approval
A response is normally provided within 24 to 48 hours of receiving your application.
Key Factors factoring has no lock-in contracts and no minimum usage level. You can also choose what invoices you want factored.
Only pay for what you use
Our flat daily fee is only charged on the invoices you factor and there is no monthly admin fee. If you don’t factor any invoices, then it doesn’t cost you any thing.
Grow your business faster
Factoring can cover the gap of slow payments. Convert your invoices in to cash in as quick as 24 hours and don’t let slow payments hold your business back.
5. 30 Years factoring experience
Key Factors have been helping Australian businesses improve cash flow since 1989 and is one of the largest independently owned factoring companies in Australia.
Speak with a factoring expert at Key Factors on 1300 884 100 today and start converting your invoices into cash!
Many industries are turning to Invoice Discounting to build their business – we’ve summarised the Debtor & Invoice Finance Association (DIFA) Industry Data, June 2015 Quarter, so you’ve got everything you need in a quick and easy-to-understand format!
On the up
Recent findings from the DIFA show that the June 2015 quarter was $15.8 billion – an increase of 6.4% on the June 2014 quarter.
According to State
NSW & ACT were the states with the highest factoring and discounting turnover in the June 2015 quarter, at 35%, with Victoria at 31%, then Queensland at 17%, closely followed by WA at 12%.
Could your industry benefit?
During the June 2015 quarter, the Wholesale Trade industry had the highest percentage of discounting turnover, at 36%. Manufacturing and Labour Hire companies also made up a large percentage.
The Transport & Storage industry formed 12% of the June Quarter 2015 factoring turnover, as well as the Manufacturing Industry. Labour Hire companies led with 27%, followed by Wholesale Trade companies 24%.
What Key Factors have to offer
At Key Factors we help SMEs from a wide range of industries improve their cash flow with flexible disclosed invoice discounting. With offices all over Australia, our local state managers are able to provide a tailored cash flow solution to suit your business.
Key Factors key benefits
Keeping simple, flexible alternative
- No lock-in or long-term contracts
- No minimum volume
- No ongoing monthly charges or annual charges
- No quarterly audits
All the facts and figures
To read the full DIFA Industry Data document for June 2015 visit the DIFA website.
Speak to a member of our team
Want to learn more about how Key Factors could help your business? Call us now on 1300 884 100, or enquire online today.