Factoring has never been so popular.

Factoring has never been so popular.

This type of finance has been around for a very long time. This lending product has been offered by nearly 65 private lenders to Small and medium business successfully for the last 50 years. Factoring is also commonly known as Debtor Finance, and some firms use Invoice Discounting as well.  The GFC has forced business to look at options beyond the basic banks.

Funding Invoices for growth.

Factoring is the most expensive of the Debtor Finance products in the Industry. Factoring companies owners normally borrow monies from banks, so when charging fees, they are dictated by the borrowing capabilities of the Factoring Lenders owners. Most Factoring lenders offer excellent service, and often assist in the collections of the facility. Paying of staff to monitor your facility, keeps costing higher than a computer system monitor.

Financing Invoices for small business can be very successful if they understand the costs of the facility and the effects Factoring has on their gross profits. Factoring can also protect them from bad debts. Factoring Lenders conducting credit searches on clients, watching payment terms, and keep records of contact through collection procedures making Default Judgement easy to ascertain.

Borrow money for Expansion

Most businesses borrow money to complete business transactions. So why would using Factoring be any different? Its because owners/ accountants see Factoring as a method of last resort. If this is how a small business will use a Factoring Facility, then its destined to fail. If you retain your funds in the bank, and use Factoring of Invoices to sustain your growth or day to day costs, then Factoring or debtor finance becomes a powerful finance tool. With funds still in your bank, if its doesn’t you can always get out of the product.

On average, Factoring cost around 3% per month. This cost can vary if invoices are not paid within a time frame. Longer paying debtors incur other fees, thus its important to liaise with the Factoring client manager in monitoring these debtors and costs.

How Trade Debtor Finance Consultants can help?

Trade Debtor Finance Consultants Pty Ltd (TDFC) as been advising a lot of small businesses since 2009, with how to use Factoring to its advantage. Single Invoice Factoring, Trade Finance, Invoice Discounting, Debtor Finance, Cash Flow Finance are a few products we explain in great detail to new business. Can TDFC help new business at start up, find a Factoring product. The answer is yes. This will depend on turnover, invoices, and number of clients in debtors list.

Different Industries have different structures in invoicing, collections, and running of business. Also they have different margins, different turnovers, and different payment terms. TDFC supports 28 lenders who have a wide range of products to suit each businesses needs. TDFC offers a no obligation free quote in writing, with the best four options that suit your businesses needs. If those options don’t suit, then we can offer more. Industries that use Factoring, also you can Contact Factoring Consultants.

For more information about Factoring, please go to our website Trade Debtor Finance Consultants or email sales@tdfc.com.au  and a consultant will call you.

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