Invoice Factoring NZ

Understanding Cashflow Finance

Invoice Factoring and Finance Frequently Asked Questions

How does Factoring work?

Factoring Process

Once you have finished your invoice run then you will need to send invoice copies from the customers to us.

A transaction (like an overdraft) will be made available for 80% of an approved invoice minus appropriate fees.

We will be paid directly from your customer.

You can draw-down the available 20% that is remaining.

The Factoring Cost

An administration fee of 2 to 5 per cent will be paid from your facility to us on the value of the invoice submitted. This fee will cover a variety of costs including drawdowns, invoice processing, liaisons with both your customers and your firm, chasing of payments, cash receipting, and the forwarding of statements.

There will be an additional 0.25% per day fee for any past due payments

How Does Invoice Factoring Work?

The concept behind invoice factoring is that it permits companies to generate instant cash flow based on their existing sales on credit or invoices, something which produces an immediate injection of capital. Financing of this sort gives businesses quick access to the cash they need to cover overhead and other expenses.

It is often much easier for companies to obtain invoice financing than more conventional loans, because they are in fact selling an asset instead of asking for an extension of credit. The key to eligibility for this type of financing is to have outstanding invoices, also referred to as receivables, from commercial customers with strong credit standing. As such, factoring is something that is typically within reach even for small companies that lack significant assets or lengthy credit records.

Do Factoring Companies Boost Cash Flow?

There is no doubt that facilitating business growth can be a challenge, particularly in the early years. Newer businesses that sell products or services on credit usually require additional access to capital once the company begins to grow. If you are suffering a cash flow problem because of credit sales you have made to commercial clients, accounts receivable financing can be just the solution required. Savvy businesses understand that there really is a better way to secure capital than seeking conventional bank loans, and factor financing is it.

What is Accounts Receivable Factoring and How Does A Factoring Company Evaluate Credit?

Factoring or invoice financing is a way for businesses to create immediate cash flow by converting the money due on sales that are made on credit terms. Businesses of all sizes prefer this financial tool to obtain flexible working capital through receivable financing accounts. This receivable credit is determined not by the financial strength of the seller of the receivables, but on that of the buying customer.

Parts of NZ Where We Provide Factoring Services

We are an Auckland based Invoice Factoring company that provides services for invoice financing in all cities of NZ. We do this in Auckland, Hamilton, Wellington, Tauranga, Christchurch, and Dunedin. We also offer this service in all other regions of NZ and with a call to us on 0800 002 453, you will allow us to put in place a well-needed cash flow finance solution for your business.

At Invoice Factoring Solutions, We Prefer Hidden Assets

When a business sells for credit, it does not realise that it has a hidden asset that can be made use of as security. We are specialists in providing you with the required cash flow by factoring your Debtors Ledger or accounts receivable. These receivables can be pledged as security and allow the business to build up a cash flow against these eligible accounts at any time. Accounts receivable financing also called invoice finance or factoring s more flexible than a standard bank overdraft, as, when the sales and invoicing grow, so does your facility for invoice factoring.

Which Industries May Benefit From The Services Of A Factoring Company?

All industries need to be examined independently due to the fact that all of them tend to invoice differently. Generally speaking, your industry sector must be one that sells to other companies, known as the debtor, and there must be an invoice or receivable generated that is verifiable or has been acknowledged in some way by the debtor customer. The services of an invoice factoring firm can be utilised by any company that customarily sells products or services to commercial customers. Sales need to be of a final nature, with no disputes or contingency conditions permitted. There must be complete delivery of the product or service in order for the invoice to be considered for funding. For industry sectors in which retentions are kept against outstanding invoices, that portion of the receivable will not be eligible to receive factoring, however the rest of the invoice will be.

How Quickly Can A Factoring Firm Improve My Business Cash Flow?

In contrast to our competitors, Invoice Factoring Solutions simplifies the invoice financing process by requiring only nominal amounts of advance paperwork. We do not base our determinations on tax documents, financial statements, or debt-to-equity ratios alone. Rather, we make our decisions mainly on the account debtor’s credit standing and the invoicing process itself. We have a strong background in assessing the quality of receivables and are generally able to make a decision in just a few days once all requested documentation is received. We pride ourselves on making it easier than ever to obtain and manage your company’s invoice financing. The application process is extremely easy, and funding can be obtained in fewer than 5 business days in many cases. The clients we serve can rest assured that they can get the funds they need promptly and focus on business operations instead.