Urgent Invoice Financing Loans
Discreet Invoice Financing
We work with private wholesale funds that offer unique features that banks and most second tiers can't match. Firstly, they don't take property security as a requirement of funding. Secondly, your invoice financing facility will be discreet (your customers won't know about it). Why is this so important? Because you don't want someone else calling your customers trying to collect money! With us you'll enjoy the following benefits:
- A Discreet facility (your customers won't know about the facility, unlike other lenders).
- Facilities up to $5M!
- 80% to 90% of the invoice amount funded upfront!
- Interest is only charged on drawn down funds that you use.
- A lender that is happy to rank second to a bank, if you decide to get bank funding in future.
- No property security is required for the facility.
- Competitive risk adjusted pricing.
Work with us today, to discover a new way of debtor finance, tailored for you!
Non property backed invoice financing
Invoice Finance Without Property Security
Most invoice financiers require property as security, or at the very least a personal guarantee that would allow them to put a caveat on a property. This greatly inhibits business owners from being able to manage their own affairs as well as preventing them from selling or refinancing their properties without needing permission from a lender.
With the wholesale funds you'll have access to through RSC, you'll get a purist invoice financing solution that doesn't require your property as security. This also means that if you don't own property, you can still get a debtor financing solution with us today!
Additionally, unlike the banks your invoice finance facility with us will not be cross secured with your other loans.
debtor financing made for you
Single Invoice Financing or Whole Debtor Ledger, It's Up To You.
Most debtor financiers will require to finance your whole debtor book, even when you don't need it! But having every invoice financed isn't necessary or cost effective. The reality is, you only want invoice financing for those customers that take long times to pay you or when you have a cashflow shortage. More importantly, you only want debtor financing on those invoices that you may need help on, and not every invoice from that customer.
With RSC you'll only need get finance on those invoices and debtors that you want financed! This saves you from having to pay unnecessary interest on invoices that you don't need finance on. You'll have the flexibility to decide which invoices you want funding on and when.
Urgent invoice financing
Urgent Invoice Financing Within 24 Hours
You know what’s worse than not having funding for your business? An invoice financier that doesn’t understand your business and the risks within it, who charges you through the roof. The wholesale private funds that we work with, take the time to know you, your aspirations, business and the risks. This allows them to create a tailored made product for you, that is priced correctly.
With the wholesale funds we work with, getting invoice financing within 24 hours won't be a problem. Once you have your account and portal set up with the wholesale funds we work with, funding is easy and often occurs within hours. You're now free to move forward with your business and focus on kicking more goals.
Contact us today, so we can get you immediate access to funds!
Debtor financing made for you
No Minimum Interest Invoice Financing
How would it feel if you weren't forced to finance every invoice you had with a financier? How would it feel if you weren't locked in with them for a year? How would it feel if there was no minimum interest? All of these things are possible with the wholesale funds that we work with at RSC.
Only pay interest for the funds you use, and for the invoices you want. You aren't locked in, nor are you forced to disclose the facility to your clients. With that type of freedom what could you achieve in your business? How much more work could you win?
Non bank urgent debtor financing
When To Use Debtor Financing?
Debtor financing serves as a great free cashflow solution to help business owners stay liquid during times of illiquidity. By financing the payment period between when an invoice is issued and when it is due to be paid, business owners like you can get on with business! Typically, businesses will use invoice financing when they are rapidly growing, or when they have already exhausted traditional funding routes such as bank loans and private lending. The best times to use debtor finance are.
- When taking on larger clients or new contracts, and you have cashflow shortage.
- When existing customers are slow to pay you and you need to fund other jobs.
- When other funding solutions haven’t provided you all the capital you need to grow.
- When you need a short term cashflow loan from time to time, instead of taking a second mortgage.
Contact us today, so we can get you immediate access to funds!
Get the funds you need with invoice finance
How Invoice Financing Works?
Invoice finance / debtor finance is a financial solution that is specifically made for B2B businesses to unlock tied up cash in unpaid invoices. To make things easy, we’ve created a step-by-step guide to help you know how the process works.
- Finance agreement: An invoice finance facility is set up with agreed terms between you and the invoice financier. A shared bank account is created, where invoice payments will land in. The facility is discreet and none of your customers are notified about the fact you are getting finance.
- Issuing the Invoice and submitting to the provider: Your business generates and sends an invoice to its customer for the goods or services provided. Whilst also submitting the invoice to the invoice financier.
- Receiving an advance: The invoice financiers advances a portion, typically 80% to 90% of the invoice amount to you within 24 hours.
- Using the funds: Your business can then use these funds to cover essential expenses like payroll, rent, or supplier payments.
- Customer payment: Once your customer settles the invoice in the shared bank account, the invoice financier will take their funds from the shared bank account and the remaining balance will go to you.
This process allows your business to improve cash flows, without the pain of waiting for customers to pay you!
Practical steps to reduce the cost of debtor finance
How To Reduce The Cost Of Invoice Finance?
With debtor finance because you're getting money upfront instead of waiting 30 to 90 days, there are several things you can do to offset the cost of your finance.
Have strong paperwork with your debtors: The better the quality of your contractors with the debtor and the clearer the terms and risk, the easier it is to get finance at a discounted price.
Negotiate terms with suppliers and contractors: Pay suppliers quicker and negotiate 1% to 5% discounts if you pay them upfront or within 7 days.
Buy in bulk: With the extra funding you now have, you can afford to buy in bulk and get a discount on supplies. Even if its a 1% to 2% saving per month, a dollar is still a dollar.
HOW TO GET INSTANT INVOICE FINANCING
What Is The Application Process For Invoice Finance?
Our debtor financing / invoice financing solutions are funded by private wholesale funds that have less stringent terms than the majors. If you don't qualify for bank funding or don't want to deal with the banks. Then our solutions with discreet facilities and no requirement for property backing are for you! Additionally the funds we work with are happy to sit behind a major bank. The application process consists of:
- A copy of your business financials.
- A review of the main contracts you wish to fund and invoice terms.
- A review of existing lenders and GSAs against your business to ensure the debtor book can be secured by the lender (they all do this).
- Loan agreements are issued for your lawyers to review.
- You upload to the portal which invoices you want funding against.
- You get funding within 24 hours.
Work with us today, to discover a new way of debtor finance tailored for you!
THE BENEFITS OF USING US FOR YOUR DEBTOR FINANCING NEEDS
Why Work With Us For Debtor Financing?
Because we are also business advisors we understand the importance of layering debt in the right way, and separating business assets to get funding. Because of this we have handpicked invoice financing funds that offer the most flexibility, don't take property as security and are happy to go behind a bank’s senior GSA position. You can be confident that our solutions will:
- Provide you with the necessary cashflow that your business needs to grow.
- We ensure the funds we work with can accommodate your other debt facilities.
- We ensure that only your debtor book is taken as security and not your other assets.
- We ensure the invoice financing facility you take, will have the flexibility to grow with your business.
Contact us today, so we can get you immediate access to funds!
Construction debtor finance solutions
Invoice Financing For The Construction Industry
Construction is one of the largest industries in Australia and as such businesses operating in the construction industry have unique requirements. We've helped a number of sub-contractors to tier 1 and tier 2 contractors get debtor finance. We've also helped contractors that do maintenance work for insurance companies get debtor financing. Whether you're building something, supplying something or installing something we can put a solution together providing the work has been delivered.
Because we and the wholesale funds we work with understand the Security of Payment Act and how often things are done in the industry, we can develop unique debtor financing solutions for your situation.
Food industry Debtor finance solutions
Invoice Financing For The Food Industry
Our founders family were the founders of Royal Nut Company, so we are very familiar with the challenges of the industry. Food production businesses are extremely unique. Firstly, because they must quickly turn around products before ingredients and the final product reach their shelf life. Secondly, the end consumer experience must be one of freshness and must appeal to the individual tastes of each consumer. Thirdly, the nature of these businesses means they must incur large upfront costs before being paid, which dramatically strains cashflow.
Because we understand the unique challenges faced in food the industry whether you're a producer, processor, farmer or distributor we are able to tailor make a invoice finance solution for you. To read more about funding solutions in the food industry read our article here.
startup invoice financing
Invoice Financing For New Businesses And Startups
Are you a new business or startup? Chances are you don't have enough credit history to go to a bank. Additionally, your revenues probably aren't that big to warrant an invoice financing facility either with a second tier. Frankly smaller facilities don't make sense for most debtor financiers, especially with initial set ups costs, which is why a number of them won't do it.
The Good News For Invoice Financing For Startups
For those businesses that we feel there is a high probability of long term growth in their business and with genuine business models. We and our partners can go out of the way to create a tailored solution, to ensure you get the funding you need. Why? Because we believe in creating long term relationships, which requires both parties to come to the table and work together.
Factoring Vs Discounting
What Is The Difference Between Invoice Discounting Vs Invoice Factoring?
Invoice Factoring
Invoice factoring involves the process whereby the financier is purchasing the invoice off the issuer (the business). The financier is then the party responsible for chasing any unpaid amounts and is an active manager in the collection process. This means that this facility is not discreet to the clients of the issuer (the business).
The main benefit of invoice factoring is that typically the amount advanced to the business is higher versus invoice discounting. However, this is offset by the higher fees (as the financiers must be covered for the collection process). Once the financiers has had the invoice paid by the issuers client, plus any financing fees, the remaining funds are paid back to the issuer.
Invoice discounting
Invoice discounting is the process whereby an invoice financier loans funds to a business using their invoices or receivable books as security. The invoice financier will have a registered security interest against these assets and will advance a percentage of the invoice amounts (70% to 90%) to the business, whilst charging interest on the funds provided.
The business is still the party that is responsible for making sure the invoices are paid by their clients, whilst also retaining control of the collection process. This also means that depending on the financier, invoice discounting can also be a discreet facility (where the business clients aren't aware of the financier’s involvement). Pricing is also cheaper with invoice discounting vs invoice factoring.
What are the interest rates for invoice financing?
Pricing of invoice financing / debtor financing is largely based on a few factors.
1. The main risk factor of debtor financing is the quality of the debtor (the party obligated to pay). If the debtor is a large company or government, then the risk of the invoice not being paid is very low. This will allow you to get better terms, than if the debtor was another small business.
2. The nature of the invoice being financed. One of the main dispute points of invoices is either the quantity or quality of the product /service being provided. Some products / services that leave themselves open to more ambiguity about quality or quantity, will attract higher pricing, than those that don't. As these transactions carry more risk. This can be mitigated by your invoice financier having a proper and in depth understanding of your invoice process.
3. The industry you are in. Some industries carry more risk of non payment and dispute than others such as the construction industry.
4. Your financials. Whilst the debtor book is the main security point of an invoice financiers, the secondary point of call is your business. Therefore the financial health of your business will play a factor in pricing.
5. The quantum of money you are using. typically the larger the facility you use, the more competitive pricing you can obtain, than smaller transactions.
Some invoice financiers will play tricks on borrowers, by stating they only charge 2% of the invoice amount per month, but only forward you 70% of the invoice value. This is greatly misleading, as interest is charged on the invoice amount, not the funds provided to you!
Realistically, and ddepending on the mix of the above factors, the effective rate of invoice financing is 11% p.a to 30% p.a on drawn down funds. Even on the higher end, this works out to be fraction per week (.6% per week), which if an invoice is financed for a month, this works out to be 2.4% interest on the funds drawn down. Assuming a 15% margin within an invoice, the 2.4% has a minor impact considering the inconvenience it is helping to solve within the business.
What are the eligibility requirements for invoice financing.
To qualify for debtor financing.
1. You must have a ACN borrowing entity.
2. You must have the need for a minimum facility amount of $250k.
3. You are in an industry / business, where once an invoice is issued, the debtor is obligated to pay, with little chance of dispute regarding quantity or quality.
4. You have enough margin in your transactions to cover the cost of capital.
What are the risks of invoice financing / debt factoring for borrowers?
Invoice financing carries less risk for borrowers compared to other forms of finance, as the financiers main form of security is their security registration against the receivables / debtor book of the business.
Invoice financiers will vary in regards to what security they require from a borrower. Some will only take the debtor book, others will want a first ranked or second ranked GSA against the business as well, others will want a personal guarantee and a number of invoice financiers today wish to have some type of property available to them.
As a borrower understanding the security position of the invoice financier you are working with, will determine the level of risk you are facing. The more you are able to narrow down their security to just the debtor book, the less risk you have of them being able to touch your other assets. Your asset protection will also be a byproduct of the structures you have in place before the loan to protect your assets.
Why would businesses use invoice financing?
The main reason businesses use invoice financing, is because the debtor book / invoices of a business, can be used as a form of security to obtain finance against! This is especially vital for business owners that don't have property security, or other forms of security to provide to a traditional lender.
This means businesses can obtain finance to help them solve their free cash flow issues, when in other instances they would not be able to obtain it. Invoice financing is superior to getting a unsecured business cashflow loan, as the pricing is far more competitive, and is an ongoing facility.
When do i use invoice finance?
Invoice financing is typically used when your business is rapidly growing, or when you need to take a loan and don't have other assets available as security. The beauty of invoice financing is it uses your invoices as a form of security, from which you can take a loan against!
The beauty of invoice financing, is you can use with other funding solutions, such as bank loans, first mortgage private loans, second mortgage finance loans, alternative asset loans and supply chain finance.
Invoice finance is a great solution for businesses that are rapid growing, that don't have the free cash flow to service their growth prior to payment!
Invoice Factoring Vs Invoice Financing?
Invoice factoring is where your invoices are purchased by a finance company. They hold the legal ownership of the invoice and chasing the money that is owed against it. Upon payment of the full invoice, and subject to terms, any remaining funds above the purchase amount and fees the financiers’ charges may be paid back to the seller. These facilities are typically not discreet, as the purchaser has the legal ownership of the invoice.
Invoice Finance is where a lender has a security interest against an invoice / loan book and is lending you money against that asset. They technically have a claim to it for funds loaned, but do not own it as such. Ultimate management of collecting funds stays with the borrower / issuer of the invoice! Some invoice finance facilities such as those offered through RSC are discreet, meaning your clients will never be aware of it.
Invoice factoring Vs Invoice Discounting?
Invoice factoring is where the financiers buys the invoice of the business issuing the invoice. They have the legal ownership and are responsible for collecting payment.
Invoice discounting is where a financier provides a loan against an invoice. Ultimate management however stays with the issuer of the invoice.
Factoring is typically priced higher than invoice discounting but offers higher LVRS than invoice discounting.
Speak to today about your next invoice discounting solution.
