Invoice Factoring can be used to finance your Working Capital. It is a form of accounts receivable financing where outstanding invoices that are due within 90 days can be converted into immediate cash that can be used by your small business.
The Auckland-based factoring company Invoice Factors and services Nationwide. You are typically paid in two installments for your invoices: the advance is approximately 80% of your invoices (less factoring fees). You will receive the remaining 20% after your invoices are paid.
If you a Working Solution for funding your business’s cashflow shortage then review the Questions below to see if this solution is well-suited for your company.
How Your Business Can Qualify for Invoice Factoring
It is easier to qualify for invoice factoring than it is to qualify for long term financing. Although profitability, annual revenues, and credit scores can be major hurdles for other kinds of loans, with invoice factoring they don’t tend to be an issue. Invoice Factors care about three main things:
- You must invoice the government (B2G) or businesses (B2B). Your customers must be established businesses and have good credit scores. Our Auckland-based factoring company must feel confident that it is likely that your customers will pay off your invoices.
- Your invoices must not be encumbered by any other loans and be due and payable within 60 days. (For example, you cannot have another outstanding short term loan where your same invoices have been pledged as security.)
- Your company needs to be up to date on your taxes or have an Arrangement with the Tax department (let’s talk if this Factoring Facility will help you obtain an Arrangement).