Invoice loans is a rising trend in Australian as businesses turn to new solutions to help improve cash flow while suffering longer invoice payment periods. As business loans go, invoice loans (sometimes called invoice finance or invoice factoring) can be a relatively low-risk way of ensuring that your company has the cash flow it needs to survive while waiting on invoices to be paid. If you are interested in invoice factoring for your business, there are some things you’ll need to consider.
Will You Be Eligible?
Not everyone will be eligible for invoice loans, and eligibility will be determined by the finance company providing the loan. The company providing the loan also needs to minimise their risk, so invoice factoring usually involves a credit check and a check on the legitimacy of the invoice for which you are seeking a loan.
What Are The Fees?
There’s no such thing as fee-free business loans, but invoice loans can be very affordable, particularly when cost is balanced against the potential benefits of reliable cash flow. However, if you are pursuing invoice factoring, you should know everything about the fees involved upfront, so there are no nasty surprises.
Is The Contract Clear?
Contracts aren’t always written in language that is easy for the average person to understand, but when it comes to invoice loans you’ll want to be sure you understand your contract in full. If necessary, get the help of a lawyer or accountant, or sit down with your invoice factoring provider and go through the contract, so you know you understand it well.
Will You Be Locked In?
Speaking of contracts, some providers of these kinds of business loans offer lock-in invoice factoring contracts. This may mean that all your invoices will be factored, which may not be something that you require. If you don’t need consistent invoice loans, be sure to confirm the contract is not lock-in and that it suits your company.
How Fast Can Payments Be Processed?
The benefit of having access to invoice loans is that your company gets the cash flow it needs with minimal delays. If your invoice factoring takes longer to process, these kinds of business loans actually don’t make that much sense. Make your invoice loans work for you by knowing exactly how long they take to process, and when your cash will be available.
Will You Need To Change Banking Arrangements/Relationships?
Most businesses already have carefully thought out relationships with their bank, and may have business loans in other forms currently on the go. The best kind of invoice factoring service is one that doesn’t disturb this. Before agreeing to any invoice loans, make sure that your current banking relationships will not be a problem, because changing them is rarely worth the effort.
Do You Trust The Finance Company?
This is probably the biggest consideration when it comes to business loans, and for invoice factoring it is that much more important. The finance company that you choose to supply your invoice loans has an enormous effect on your experience before, during and after the process. Doing your research upfront and picking an operator you trust can save you a lot of stress and worry down the line.
If you’re looking for a provider of business loans in the form of invoice factoring, Apricity Finance is a smart choice. Apricity Finance offers a high-quality, customer-focused service that is dedicated to making invoice factoring work for you and your company. Our product is not a loan – simply a way for you at access your own capital faster. Our financial team takes the time to get to know your business, to understand how invoice finance can help ease your cash flow worries. Call Apricity Finance today for more information.