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Cash Flow Finance |
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There are three main types of cashflow finance:
1. Factoring
2. Invoice Discounting
3. Export Factoring
Factoring
Factoring allows a business to secure cashflow against its invoices but the financier manages the collection of invoices and the maintenance of the debtors ledger.
It is suitable for all businesses that sell on credit terms to other businesses, but particularly those that lack the resources and expertise to manage their debtors efficiently, and those going through rapid growth phases. Factoring is an alternative to an overdraft, without the restrictions of an overdraft.
Invoice Discounting
Invoice Discounting is for businesses who wish to access the money tied up in their invoices, but who wish to collect their invoice payments and manage and maintain their own debtors ledger.
It is designed for well-established companies who sell to other businesses on credit terms and who have expertise in managing and maintaining their debtors ledger.
Export Factoring
Exporters face cashflow management challenges. All too often, goods are held up on docks and invoices take longer than expected to be paid.
Overseas buyers increasingly expect favourable credit terms, which they are able to obtain in their local markets. To compete in this market you will normally have to provide equivalent trading terms.
In addition you will have to deal with the complex and time-consuming job of collecting overseas payments, handling different currencies, languages and banking procedures.
Instead of requesting Letters of Credit from your overseas customers, you can offer them open account trading terms while retaining the benefit of a cash drawdown facility.
If you would like to speak to one of our business consultants for further information you can contact us on 1300-551-826. Alternatively, if you would like us to contact you then please fill in our Enquiry Form.