What is Invoice Finance?
Invoice finance is a form of business funding that gives businesses access to capital from their accounts receivable. Businesses are able to close the gap between the time they invoice a customer and when they receive payment.
When considering your invoice finance options, it is easy to become confused. Invoice finance can also be referred to as debtor finance, invoice factoring, invoice discounting, cashflow finance and accounts receivable finance, and while these products work on the same principle (leveraging invoices to get funds back into the business sooner) there are some important differences that businesses should be aware of.
At Apricity, we have one simple invoice finance solution – selective invoice funding. Rather than taking on the whole leger of a business (as you might find with traditional invoice factoring or debtor finance models) clients have the flexibility to choose which invoices to fund, when and what percentage (within prescribed limits).
How Apricity Invoice Finance Works
We finance up to 95% of approved invoices upfront. This means businesses gain access to their own funds faster; resulting in better cashflow management, increased production capability and better ability to take advantage of opportunities for growth.
Our invoice finance is an ideal solution to support the specific growth needs of SME’s who supply goods or services to large corporates or government. We offer one of the highest advances on 30-day invoices currently available in Australia and New Zealand, paying up to 95% of our customers’ invoices on approval.
What are the Benefits of Using Invoice Finance?
Cashflow is critical for small business. Businesses need cash to operate; pay employees, purchase or hire equipment, distribute their product – as well as cover rent and utility costs. They also need capital to invest and grow. Often businesses experiencing rapid growth will often struggle with cash flow because they have exhausted their lines of credit, already mortgaged their house or built up a tax debt. This is where invoice finance can be really useful.
6 Reasons Why Apricity Invoice Finance is Ideal for Growing SMEs
1. Better Cash Flow
- No waiting for invoices to be paid, get your money back into the business faster
- Better planning and management capabilities come with payment surety
- The ability to meet your staffing, tax and supply obligations without interruption
2. Less Risk
- Your invoices are the security (we won’t ask for your home or other personal assets as collateral)
- Getting paid earlier can mean better cashflow and less need to take on extra debt
3. More Flexibility
- Choose which invoices you would like funded, when, and at what percentage
- No ongoing fees or lock in contracts
- Use the facility as little or as much as you need to
- No concentration limits on your invoices
4. Support Business Growth
- Scale your business up or down quickly
- Take on a new project knowing that your obligations can be met
5. Time/Value of Money
- A dollar back into your business sooner can be invested, creating a larger return
- Unlock business potential through greater certainty and control
6. Support Business Growth
- Clear existing debts and overdrafts to pave the way for further finance (if required)
- Free up cashflow by reducing your overdrafts and credit cards limits
To read more click here.
Is Invoice Finance Right for You?
An invoice finance facility is ideal for businesses providing goods or services to high credit customers. These may include; government, major telcos, supermarkets and infrastructure businesses, hotel chains, importers/exporters and distribution companies.
Your business may be experiencing a period of rapid growth; taking on a new business opportunity or have won a new contract. You may need to invest in more staff, hire or buy new equipment, or settle existing debts before you can proceed. Invoice finance offers a way to receive payment from your invoices as soon as they are issued, meaning you get the funds back into your business (and back to work), sooner. As your debtors have been assessed as viable upfront by Apricity, your business receives payment straight away.
A reliable invoice finance facility can have a stabilising effect on the cash flow of your business. Rather than being under the cloud of servicing debt, you may find you are in better control of your financial situation, obligations can be met, and the long term can be planned for.
Frequently Asked Questions
1. What is the difference between invoice finance and invoice factoring?
2. Is invoice finance a loan?
3. How much does invoice finance cost?
4. Are there any fees or lock in contracts?
5. How do we compare?
6. What are concentration limits?
7. My lines of credit are at their limit, can I still use invoice finance?
8. If I use invoice finance, can I still borrow from other sources?
9. Is all invoice finance the same?
Selective Invoice Finance is the term we use at Apricity; customers have the flexibility to choose which invoices to fund, when and what percentage (within prescribed limits).
Other Lending Models such as invoice factoring or invoice discounting may take on the role of managing the entire debtor ledger of business and chasing payments – meaning you cannot choose which invoices you fund.
Invoice factoring: Read more
Invoice discounting: Read more
Debtor finance: Read more
Accounts receivable finance:
10. I’m already using invoice finance, why should I switch to Apricity?
Apricity Finance – Who Are We?
Founded by a team of experienced investment management and finance professionals, our first office opened in New South Wales’ Southern Highlands in 2013. In 2016, we opened offices in Sydney, Brisbane, Melbourne and Auckland. Our goal is to become the leading provider of invoice finance in Australia, without losing our personal touch. Great relationships are at the core of our business. All of our clients are safe in the knowledge that their needs are our first priority and they have access to the decision-makers at any time.
How Invoice Finance Has Helped Businesses Reach Their Potential?
We are a bulk haulage business, transporting aggregate and fill for two large infrastructure companies and a few smaller corporate clients.
Our main business issue came down to cashflow caused by erratic scheduling. We have clients that are very last minute with their needs, while others are more organised – this means we run into cashflow issues when we need to pay our drivers or fuel suppliers but are waiting on the payment of our own invoices. We also had some opportunities on the table to grow our business, but we were unable to act on them due to this cashflow instability (we were also very wary about getting into further debt).
Invoice finance was a new product to us but we could see straight away it was a great option to unlock the finance from our invoices, improve cashflow and create some working capital for expansion.
Since we began working with Apricity our revenue has doubled, we have been able to take advantage of larger opportunities without having to worry about how we would pay for the additional costs, in particular employees and equipment. Invoice finance gives us flexibility and quick turnarounds as well as having no requirement for extra security (as asked for by our bank).
Our business specialises in project management, labour-hire, engineering as well as commissioning/closeout of major projects for clients in the mining and heavy industry sectors.
As a small supplier to some very large players, we quickly found ourselves in the backbreaking position of having a labour force in place for a project, but then waiting anywhere between forty-five days to two and a half months for our invoices to be paid.
A review of funding options was undertaken, looking at the offerings of our Banks as well as other debtor finance companies. Quite honestly, we were put off by the extensive fees charged, the limits and rigidity of the options available, as well as needing to make an ongoing commitment to one supplier. We chose Apricity Finance for the simple fact that they offer one flexible product that we can use as and when we need to.
Cashflow is key to any small business and since we began our relationship with Apricty, we have been working in a much more stable environment. We currently have our largest ever workforce (90 people) employed and can feel confident that they will all be paid on time, which is critical for a business like ours.
To read more testimonials, click here.