Factoring.
This word is often looked upon as a dirty word in finance. Factoring or Debtor finance is the name given when financing invoices and getting paid for them in 48 hours instead of waiting 30, 60, or 90 days.
Factoring has been present for thousands of years. Often it has been used as a method of last resort and therefor coping the blame for sending business's owners broke. In most cases this product will highlight deficancies in company procedures and if left unchecked will become a nightmare.
In some circumstances it can be a very costly exercise because they think factoring companies will give them cash flow and collect debts for them. Often forgetting that they are finance companies and make monies of interest borrowed.
Trade Debtor Finance Consultants was set up to offer business's a free quote and consultation about these products. Our firm is here to answer those more difficult questions and if any of our lenders are chosen, we offer support for the life of the factoring loan at no direct cost to your firm.
Factoring is a very positive finance product if it is used to grow your business. It may not be as cheaply priced as a Line of Credit, or overdraft (which are normally set and secured by directors assets). However Factoring or Debtor Finance is often secured by one business asset. Your debtors! Borrowing against your debtors depends on the size of your receivables not your assets.
Factoring firms do credit checks, set limits, set exposures, and is the safety net for business's looking for new clients. If you give a Factoring firm the new clients ABN number before you comence sales or work, they will conduct a credit search and set a limit assisting business with the application process.
As stated you don't want factoring firms collecting invoices. They make their monies of the length of time it takes them to be paid, so its always a conflict of interest. Keep the collections in house, make sure your know the length of time it takes to be paid, and factor accordingly.
TDFC consultants help understand all the ins and outs of these products. We find the lender or lenders to suit your factoring requirements with just one call.
For a free quote or consultation on Factoring, please email: mail@tdfc.com.au or visit our website www.tradedebtorfinance.com.au
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