What Is Invoice Financing And The Benefit of it?

Invoice financing is when a financier will use your invoices payable by your customers as a form of security, to provide you with upfront finance, typically 80% of an invoice amount! Then when the invoice is paid, they deduct the principal and interest for the period, and you get the rest! This helps business owners solve free cash flow problems, and ensures businesses are liquid so they can continue to grow!

Get in touch with us for an immediate funding solution!

Urgent Invoice Financing Loans

Discreet Invoice Financing Delivered As Needed

At Royce Stone Capital we have exclusive wholesale invoice financing funds that work with us, that mortgage brokers don't have access to! The reason we've hand chosen these funds, is they don't take property security as a requirement of funding unlike other lenders, and they offer more flexible terms than banks and second tiers. The funds we work with are purist invoice financiers, that are coaligned with you. Enjoy the following benefits:

  • A Discreet facility (your customers won't know about the facility, unlike other lenders).
  • Facilities up to $5M!
  • 75% to 90% of the invoice amount funded upfront!
  • Interest is only charged on drawn down funds that you use, not on the face value of the invoice amount like other lenders!
  • 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 private lending, tailored for you!

Smiling financing director 4
Non bank urgent invoice financing loans

When To Use Invoice Financing?

Invoice financing serves as a great free cashflow solution, to help business owners stay liquid. Invoice financing ensures businesses have the cashflows they require to continue growing, by financing the payment period between when an invoice is issued and when it is due to be paid! Typically, businesses will use invoice financing when they are rapidly growing, or when they have already exhausted traditional funding routes.

  • Get funded, when taking on larger clients, to help with staff payments and supplies.
  • Get funded when you need to fund other jobs, whilst waiting on payment for work you've already done for other clients.
  • Get funded, when customers are delaying payment and you can't afford to wait.
  • Get funded, when your business requires an extra cash injection to grow or survive.

Contact us today, so we can get you immediate access to funds!

Invoice financed example 3

Application Process For Your Invoice Financing Solution

Our invoice financing solutions are funded by private wholesale funds, that mortgage brokers don't have access to. This means unlike the banks or most second tiers, the funds we work with have less stringent lending terms compared to the major players. If you don't qualify for bank funding or don't want to deal with the banks, and wish to have a discreet facility, without providing extra property security to the banks, then the funds we work with are for you! 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 do all this).
  • Loan agreements are issued for your lawyers to review.

    Work with us today, to discover a new way of private lending, tailored for you!

    Finance approved

    Why Work With Us For Invoice Financing?

    Because we are also business advisors, we understand the importance of layering debt in the right way, and separating business assets as a form of security 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!

      Advantages of finance 5

      1 / 3

      The right capital partner for debtor financing

      At Royce Stone Capital, we excel in establishing a unique ecosystem where borrowers can secure funds directly from the source - family offices or private funds that brokers don't have access to in Melbourne or the east coast of Australia. Not all invoice financiers are equal, and some prefer certain industries over others, some have more stringent lending metrics, and other want extra security beyond a debtor book.
      Our specialisation in business advisory, ensures that you're not just obtaining a loan; you're entering into a partnership with a lender who wants to support your long-term growth, that is tailor made for you! Experience the difference of a financial solution that truly understands you and your debtor financing needs, without the headache of the banks.

      2 / 3

      The urgent private debtor financing funds you need

      With Royce Stone Capital, you gain the advantage of swift capital provision, even on short notice, thanks to our direct connection with family offices and private wholesale funds. This efficiency is a hallmark of our debtor financing, setting us apart from other providers who often get entangled in bureaucratic red tape.
      In most cases, our debtor financing solutions, whether funded by a private wholesale fund or family office, proceed smoothly without the typical complications of an investment committee. Experience the efficiency and speed of our invoice financing services, designed to meet your urgent financial needs.

      3 / 3

      Tailored invoice financing loans, made with decision makers.

      Our business model is centred on facilitating direct interactions between borrowers and key decision-makers (family offices) or private wholesale fund managers that are self funded. This direct connection allows for quicker negotiation of terms, better rates, and eliminates unnecessary bureaucracy.
      Moreover, this approach fosters the establishment of long-term relationships with capital partners. Over time, this relationship builds trust and paves the way for increasingly favourable terms. Experience the benefits of a direct, transparent, and efficient debtor financing process with Royce Stone Capital

      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.

      Speak to us today to fund your next business transaction.

      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.

      Speak to us today to fund your next business transaction.

      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.

      Speak to us today to fund your next business transaction.

      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.