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When your business is struggling with the cash flow it needs to grow, or even simply to survive during trying times, it may be tempting to use your house to help you finance your business. A secured business loan might aid in providing your business with the cash injection it needs, but it comes with a high price of potentially losing your home if you can’t repay the loan.

It’s important to understand exactly what you’re getting into if you do apply for a secured business loan, and you should also know there’s another option. With invoice financing, you can use your sales invoices as security to get access to immediate cash flow, instead of using your home to fund your business.

Why take the chance of losing your home when you can simply release cash from your invoices, getting prompt access to money that you’ve already earned? Let’s take a closer look at the difference between a secured business loan and using accounts receivable as collateral to finance your business.

What Is a Secured Business Loan?

When you take out a secured business loan, you have to offer some form of assets as collateral. Assets commonly used for a secured business loan are a commercial property, residential property, vehicles, and equipment. In some cases, banks tend to also take a blanket security over all the assets of the company.

Secured loans make the transaction less risky for the lending institution, as they can take the asset to recoup any losses when you are unable to make your loan repayments. Business owners who use their home as collateral can run the risk of losing their home if they default. If the bank or lending institution has a blanket security over all the assets of the company, you could also run the risk of losing your business as well.

Key Factors invoice financing does not require property security, or a blanket security over all the company’s assets. It is a great option for those business owners who are seeking a more flexible business finance option.

What Is Invoice Financing and How Does It Work?

Invoice financing is a way to create cash flow based on your outstanding invoices. In other words, it gives you access to the money you’ve already earned for the sale of goods delivered and services rendered before your customers pay their invoices. It bridges the slow payments gap and allows you to pay your bills, cover ATO obligations, buy more inventory, and pay wages on time.

 With Key Factors, the invoice financing process is simple:

  • Invoice your clients as normal and send us a copy
  • In as quick as 4 hours, we can advance you with up to 80% of the invoice value
  • We will then credit your account with the remaining 20%, less any accrued fees, when your customer pays us

For more than 30 years, Key Factors has been helping small and medium businesses improve their cash flow with invoice financing. We make the process simple and transparent with no lock-in contracts, no quarterly audits, and no minimum factoring volume.

Key Factors Invoice Financing Security Requirements

Key Factors takes your accounts receivables as collateral, so you don’t have to put your house or other properties at risk.

Business owners using commercial or residential property to fund their business should look into invoice financing to free up their assets.

Your invoice financing facility can also be set up in conjunction with your current financial arrangements, as security is only taken over the receivables and not over all the company’s assets.

Benefits of Invoice Financing Compared to Secured Business Loans

It’s important to explore your business financing options, particularly as there are some distinct benefits when comparing invoicing financing with a secured business loan.

The Key Factors invoice financing difference:

  • No property security.
  • You can get an approval with Key Factors in as quick as 48 hours, compared to banks or other lenders where you could be waiting weeks for a response.
  • There are no monthly interest repayments or admin fees, and you will only pay for what you use.
  • We are transparent about fees from the very start, so you’ll know how much each transaction will cost.
  • There are no minimum monthly factoring requirements, so you’ll have the flexibility to send us as much or as little invoices for funding as you need.
  • There is no lock-in contract and no minimum term, unlike secured business loans.
  • Funding for invoices in as quickly as 4 hours.
  • Our friendly local team is only a phone call away.

Conclusion

Key Factors have been offering customised invoice financing solutions to Australian businesses since 1989. We are the country’s leading independently owned invoice financing company. We credit that to our dedication to delivering a seamless customer experience, our commitment to a transparent process, and our wonderful staff, who truly care about helping small businesses succeed.

If you are a business owner that simply wants to explore your options and has a monthly turnover ranging from $50,000 to $4,000,0000, invoice financing may be an ideal solution for your business. Contact us today by calling 1300-884-100 or fill out an enquiry form and an invoice financing expert will be in touch to discuss how you can improve your business cash flow without using your home as collateral.

With the sudden increase in wind up applications for SMEs – could you be in danger?

In recent months, businesses owing the ATO (Australian Tax Office) $100,000 have been wound up, as the new crackdown kicks in. This indicates a clear change of focus, likely to be due to the Government’s attempt to recover unpaid revenue.

With applications by the ATO to wind up companies soaring, the message is clear – get a payment plan in fast. Otherwise your company could be at risk.

Invoice Factoring Companies In PerthThe ATO are toughening up

With Western Australia poised for blow out, as debt levels surge and revenues dive, the ATO have been forced to get tough. Thus resulting in them taking quicker action to recover debts, such as company winding up proceedings and initiating bankruptcy proceedings.

Wind up action explained:

When a court orders a company to be wound up, an official liquidator is appointed to sell the company’s assets and distribute the resulting funds to the company’s creditors.

This action will be taken up if a company has failed to pay its debts and has not been able to make a suitable payment arrangement.

Why the sudden stricter rules?

Previously, the ATO would usually have waited for a company’s debt to them to reach around $340,000 before taking action. However the new standard is coming in on average at $93,000 – showing a huge drop.

The motivation – the government has a strong desire to recover funds.

Given the ATO is a substantial driver of the current volume of insolvency appointments, the expected increase in debt recovery action by the ATO results in taxpayers who fall behind not having so long to resolve issues before the ATO makes the decision for them.

After a business is wound-up, their assets are then liquidated in order to cover the unpaid tax bills.

Alternative Finance is a must – consider flexible invoice finance

Last year, thousands of businesses where closed down to meet unpaid tax bills, showing just how important it is to be able to access alternative finance for urgent commitments such as tax payments.

This policy is not a new one and was actually updated back in June 2013, stating that the Government would be taking firmer action, although, until now it appears that they had not been keeping on top of the stricter policy.

Who will it affect?

Small and medium sized businesses appear to be the ones suffering from the hit.
Many SMEs (Small Medium Enterprises) can show profit on paper, but still suffer from poor cash-flow. Not only can this mean they struggle with urgent payments, but also often prevents growth of a business. This is where Debtor Finance and flexible invoice finance comes in.

How the wind up action could affect you

Invoice Financing PerthNow the ATO have warned you that they will be taking legal action earlier, plus issuing penalties in order to collect unpaid revenue – you are lucky enough to be able to take action before it is too late.

Factoring can give you piece of mind and more opportunity.

How using a factoring company can prevent your company being affected…

The answer to avoiding the wind up action is simply – pay your ATO bills on time. However, sometimes this is easier said than done. If there is a gap between when a bill is due and when a clients payment is made, that is where the issue occurs.

Factoring enables you to draw funds from your accounts receivables to pay your ATO bills. To have this explained in further detail, click here.

Next steps:

With the number of wind-up applications lodged by the ATO steadily rising, as a small business you could be next.

For small businesses that looked at the July 31 tax payment deadline with dread – you’ll never want to feel that way again. Make sure you have funding in place to cover the pressing payments, oppose to scraping through, or worse, not making it to the following year.
Planning ahead is the key – address ways you can manage your cash flow more effectively, such as alternative finance to reduce risk of any financial shocks or hidden fees.

Far too many businesses are leaving it too late to seek assistance, take note from the recent ATO activity:-
1. The ATO are more aggressively pursuing debts, even as little as $93,000
2. A winding up application is the last step the ATO will take after the ATO has exhausted all other recovery options, so don’t leave it till then
3. Any business with an outstanding taxation debt and no current repayment arrangement in place is at risk of being wound up by the ATO.

Are you at risk?

The best opportunity for recovery for a business is to seek professional advice early.

Act now to find the funding you need to meet your tax obligations.

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.

Invoice FinancePost the GFC, more and more SMEs are finding it difficult to secure finance due to Banks tightening their credit policies and preferring more asset based lending. The extended waiting period to get access to finance have also prompted some SMEs to seek alternative source of funding like Invoice Finance to provide them with immediate cash flow injection, as they really needed the funds yesterday.

Below are some key benefits associated with Key Factors flexible Invoice Finance Service:

No need for real estate security

At Key Factors our Invoice Finance Facility relies on the quality of the client’s ledger. This helps companies attain the much needed finance support, where they would otherwise struggle to secure funding by not being able to provide property security.

As your business grows, your facility grows with you

Key Factors Invoice Finance facility is designed to support growing businesses, where the cash you access is directly proportionate to your sales. So the more sales you make, the more cash you can get, without the need of additional security.

Flexible Funding

Key Factors Invoice Finance Facility allows you to draw funds from as much from your invoices as you like, or as little as you like, and there is no requirement to finance your whole ledger.

No on-going monthly admin charges or annual charges

Our Invoice Finance Facility has no monthly admin charges or annual charges. A flat daily discount charge is applied on usage, so you will only pay for what you use.

Fast Approval

A quick response is provided within 48 hours of receiving an application.

Quick Funding

As the need for funding arises, you can draw up to 80% on the face value of your invoices in as quick as 24 hours.

For more information on how our Flexible Invoice Finance can help your business call 1300 884 100 and speak to us today.

Invoice Debtor FinanceInvoice debtor finance is great for companies producing invoices and have commercial clients on accounts.  Invoice debtor finance allows these businesses to maintain a constant cash flow despite payment delays.

At Key Factors we believe all companies can use invoice debtor finance to improve their cash flow, although some businesses may benefit more than others. These businesses relies on invoice debtor finance to service growth, and meet their operational expenses.

Businesses suitable for invoice debtor finance

Start-Ups

Businesses with limited trading history may find it hard attain finance due to their limited trading history. If you are a start-up business with a high level of outstanding receivables and a large client base, Key Factors factoring finance may be the best solution to improve your working capital.

SME’s

Like start-ups, SMEs may find it hard to gain sufficient finance support. Restrictive lending at times requires real estate security, or strong trading results. At Key Factors we assess the strength of your receivables, where the cash you access is directly proportionate to your sales.

Companies with high receivables

Cash tied up in unpaid invoices can restrict a business from further growth or getting on top of operating expenses. By factoring your invoices you can get up to 80% on the face value of your invoices, in as quick as 24 hours. This allows your business to maintain a more constant cash flow.

Companies with slow payments

Slow payments can put a halt on business operations and further expansion. Instead of waiting 30, 60 or even 90 days to get paid, factor your invoices today and release the cash tied up in your unpaid invoices, whenever you need it.

How does invoice debtor finance work?

  1. You invoice your customers for goods or services and send Key Factors a copy.
  2. The factor then gives you up to 80% of the value of the invoice.
  3. The remaining 20% of the invoice is credited to you as soon as the customer pays, less any accrued fees.

Call us now on 1300 884 100 to find out more about how debtor finance work.

Ever consider using an invoice discounting facility to improve your cash flow and get on top of ATO bills?

The problem

Invoice Discounting FacilityFor new and growing businesses, it can be difficult to keep on top of ATO bills and make payments on time. There are so many practical aspects of setting up or expanding that tax administration can often be the last thing that gets done. Also, if your business is growing significantly your tax obligations may change from one period to the next, making it tough to keep track of.

For peace of mind and for compliance purposes, it’s a good idea to pay your ATO bills on time. However there may be a gap between when your bill falls due and when your clients or customer pays you.

The solution – invoice discounting facility

Invoice discounting facility enables you to draw funds from your account receivables to pay your ATO bills. For example, you have an ATO bill due but there are not enough funds in your account to make the payment as you are waiting on payments from your customers. By using Key Factors factoring service you can get up to 80% on the face value in as quick as 24 hours to immediately pay for the ATO bill.

Key Factors have assisted SMEs from a wide range of different industries including but not limited to labour hire and recruitment agencies, manufacturing operations, wholesalers, commercial cleaners, mining companies, and transport/logistics groups. Having access to immediate cash flow by factoring invoices not only allows you to meet unexpected ATO bills but can also help to alleviate a range of cash flow issues.

Flexible invoice discounting facility

If you have found that cash flow and ATO bills are a recurring problem, you may wish to consider establishing a invoice discounting facility. There is also no minimum and no long-term contracts with Key Factors invoice discounting facility and you will only pay for what you use. We also offer fast 48 hours approval and it is relatively simple to apply.

Call us now on 1300 884 100 to find out more