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What You Need to Know About Debt Factoring

September 13, 2017

Debt Factoring

Debt Factoring allows businesses access funds owed to them before it is paid by the debtor. It’s a way for businesses to access most of the money owed to them in their outstanding invoices and receive the rest when the customer pays.

How does debt factoring work?

Invoices are forwarded to the factor like Key Factors who then provides up to 80 per cent on the face value of the invoice within 24 hours to the business to access as necessary. When the invoice is paid in full to the factor, the business receives the remaining 20 per cent less any accrued fees.

Businesses that are eligible for debt factoring must have B2B sales on credit terms, and invoices for the sale of goods or services that have been fully delivered.

Advantages of debt factoring

There are quite a few advantages to using debt factoring for businesses of all sizes. It’s a flexible alternative to traditional business loans as it is adjusted based on the business’ sales. Debt factoring can hugely benefit cash flow since businesses can get instant access to a large proportion of the money owed to them instead of waiting for payments to arrive. As a result of this early payment discounts can also be removed or reduced.

Businesses that use debt factoring has better negotiating powers with suppliers by using the money they receive to take advantage of early payment discounts and bulk-buying opportunities.

One of the main advantages of debt factoring is to provide working capital for growing companies.  Access to instant cash allows a growing company to buy more equipment, meet on going expenses and hire more staff to service the increase in workload.

The advantages of debt factoring with Key Factors

  • No lock-in or long-term contracts
  • No minimum factoring volume
  • No ongoing monthly charges or annual charges
  • No quarterly audits
  • No property security
  • Fast 48 hours approval

With offices in Perth, Sydney, and Melbourne, our local state managers can provide a tailored cash flow solution to suit your business. Find out how Key Factors’ debt factoring, debtor finance and factoring finance and can benefit your business by calling 1300 884 100 today!

Enquire now

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What our customers are saying

  • 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
  • We had been with Key Factors for 3 years & 8 months when a broker convinced us to switch to another company. We didn’t read the fine print and were hit with annual fees, and constant audits which wasted a lot of our staff’s time. When we wanted to leave go back to Key Factors, we had to serve 12 months and another 3 months notice period, or were going to be hit with exit penalties. We had none of this at Key Factors, just simple factoring.

    - Director, Manufacturing Company, Mining, WA
  • Key Factors flexible debtor finance have been very valuable to our business and so simple to use. To have the money the same day we need it is very useful. Their service is fantastic and the staff is always friendly and professional. We would highly recommend Key Factors to anyone looking into improving their business cash flow.

    - Director, Earthmoving Company, QLD

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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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