Invoice financing is a fast and easy way to get your business the working capital it needs. Invoice financing Australia allows businesses to sell their invoices in advance of receiving payment. This ensures that you immediately have access to the funds you need without having to wait for customer payments or take out a loan from a bank.
What exactly is invoice financing?
Invoice financing is a form of asset-based lending that allows you to sell your invoices at a discount and receive cash upfront. In other words, invoice financing is a way to get money for your business by selling your unpaid invoices.
It’s an alternative to traditional bank loans (which can take weeks) and invoice factoring (which charges high fees).
How does it work?
Invoice financing is a way to get money for your invoices. It allows you to get paid faster, and it’s a smart way to access working capital.
Here’s how it works:
- You sell an invoice on the platform at a discount (usually between 30% and 70%). Your buyer pays the full amount of the invoice instantly, but they only receive half of its value (or less). You receive the other half when your customer pays off their debt with you in full.
- If they don’t pay up within 90 days, then both parties lose out–the buyer loses their investment, and you lose out on interest payments from them over time as well as any opportunity costs associated with having capital tied up elsewhere during this period (for example if someone else could have used those funds).
How do you know if invoice financing is right for you?
To determine if invoice financing is right for you, consider the following:
- Are you able to track your accounts receivable? If not, this could be a major stumbling block. You’ll need to set up some sort of system that can help keep track of all the invoices as they come in so that when it comes time to pay them off or sell them on an invoice factoring platform (like ours), there’s no confusion about what needs to happen next.
- Do you have good credit? This shouldn’t be too hard; most businesses have excellent credit scores because they have been operating for some time and have proven themselves reliable over time. However, if yours isn’t spotless yet–or at least decent enough–you may want to put some effort into improving it before applying for an invoice financing loan through us or elsewhere.
- Is there enough business volume available? If so much as one customer decides not to pay up after agreeing upon terms with them during negotiations over their invoices with other companies within our network then there won’t be enough money coming in through those channels alone which means no profit made from selling them off later down road either!
Conclusion
Invoice financing is a great way to get the working capital you need to grow your business. It’s also a smart way to manage cash flow and reduce risk, as invoice financing Australia gives you access to funds before payment is received.
