A quick guide to invoice finance and debtor finance

What is debtor finance?

Debtor finance, also called invoice finance or invoice discounting releases the cash from your debtors, allowing you to raise working capital for expenses, improve business cash flow, paying salary or expand business operations.

What  businesses suit debtor finance/invoice financing?

• Manufacturing businesses
• Businesses in wholesale trade
• Labour hire or recruitment
• Mining
• Argiculture
• Transport and storage
• Property and business services

 What are the benefits or features of invoice finance?

• Funds are readily available - credit sales are converted into cash usually within 48 hours
• Invoice finance can fund up to 90% of your debtor invoice value
• You know for you sure that you will receive the cash as funds are based on your business sales and not your assets
• Your business can negotiate better trading terms with suppliers or early settlement discounts for early payment
• Invoice discounting fees are usually cheaper than settlement discounts
• Conveniently access the cash when required
• Business cash management flexibility for seasonal and daily requirements

What are the costs of using invoice finance for my business?

Costs will vary depending on the lender, setup structure, size and risk

For more information about invoice finance and how it can be used to grow your business, speak to one of the mortgage brokers at Intellichoice on +61 7 3624 1900. Our experienced mortgage brokers have access to other business cash flow solutions that may be also be suitable for your business, including trade finance, inventory finance, import finance and equipment rental hire.

Myths of invoice financing

There are many myths and misconceptions about invoice financing, which the article below tries to address:

https://www.intellichoice.com.au/find-right-invoice-finance

Trade finance solutions for your business

Is your company is having difficulty getting a business loan from a traditional bank or mortgage lender? Do you need help expanding and growing operations overseas but your bank is restricting your growth? Then your business needs to speak to one of our Australian mortgage brokers about import finance or trade finance. This business cash flow solution can be tailored to suit your funding needs.

Import finance or trade finance gives you the confidence to trade and take advantage of any market opportunities that arise.

Some of the benefits of import or trade finance include the following:

• Import finance provides for all aspects of manufacture, import, commissioning, payment and long term asset finance
• Pay overseas and local suppliers for goods with trade finance
• Trade finance gives your business greater flexibility and liquidity
• You don't miss out on business opportunities due to inadequate cash flow
• Trade finance can help you to improve your negotiating position with suppliers as you are now able to accept quick payment terms and import greater quantities and obtain bulk discounts
• Allows for timely payments to your suppliers
• Import finance does not require property security
• No deposits required
• Get up to 100% finance of purchase cost with import finance

Case Study Example
Our Brisbane mortgage broker recently helped a client who had new business opportunities for growth. His turnover would increase from $1 million to $4 million a month.

The bank had taken 2.5 months to get approval. It was costing our client's company a lot of money in lost business opportunities, but also to get the facility set up.

Our mortgage brokers in Australia introduced him to a new funder and he got approval within 1 day and the business finance facility was set up within 2 weeks at the same rate that the bank was going to charge him.

Our dedicated trade finance team will help you through the whole process and provide you with more information on how import finance can help grow your business. Contact one of our mortgage brokers today on +61 7 3624 1900 to find out more about import finance and whether this is suitable for your business.

Commercial property finance

The market and economists are expecting that the Reserve Bank of Australia (RBA) will slowly continue to raise the cash rate. The average view is for another 100 points (1%) of rises over the remainder of the calendar year.

The RBA will have an interesting balancing act this year as it continues its vigilant watch on inflation whilst allowing the economy to grow from a weak 2009. Many areas of the economy such as proerty and construction are still adjusting to the new financial landscape featuring scarcer, more expensive funding are especially susceptible to increased rates.

With the cash rate likely to be close to 5.00% pa by the end of 2010, commercial borrowers should consider what impact these likely changes will have on their financing and ability to service interest. The RBA's decision to drop rates from 7.25% in October 2008 to 3% in April 2009 provided strong relief to those with high levels of debt or assets with falling income levels. However, the combination of expected RBA increases and the rises in margins charged by lenders will see interest costs continue to increase for those on variable facilities or having to rollover/refinance existing funding.

The positive news for commercial property is that rising interest rates will generally reflect an improving economic outlook this year and a better operating environment.

If you require commerical loans or development finance, speak to the commercial finance team at Intellichoice today on +61 7 3624 1900 or visit the website on www.intellichoice.com.au.

Business confidence in Australia soars

The outlook for businesses in Australia is at its highest level in 5 years with business owners and senior executives confident of a strong June 2010 quarter.

Australian businesses have been buoyed by a sustained economic recovery and the fact that Australia avoided a technical recession. Any fears that the Australian economy might suffer a second shock have all but disappeared. However, inflation pressures are building, which could negatively impact any hopes for growth.

In light of the positive outlook, if you need business finance to expand and grow your business, speak to the mortgage brokers at Intellichoice. We have access to a range of business loan products, including commercial finance, invoice finance, trade finance and inventory finance. Call +61 7 3624 1900 for more information about our business cash flow solutions.

Get more information about invoice finance

If you want to expand or grow your business, the mortgage brokers at Intellichoice have a huge range of business finance solutions to meet your business needs, including:

• Commercial loans
• Business Loans
• Invoice Finance
• Trade Finance
• Inventory Finance or Stock Finance
• Equipment Rental Hire
• Development Finance

Speak to a mortgage broker on +61 7 362 41900 today for more information about invoice finance and whether this is suitable for you. Intellichoice have access to a wide range of business cash flow solutions to meet your business needs.