Factoring Finance
If you're a successful wholesaler, manufacturer or service-based business who sells
on credit terms, with debtor finance, you can borrow funds using the trade value
of your debtors as collateral. This allows you to gain access to your accounts receivable
prior to actually receiving the funds, maximising your business cash flow.
To qualify for debtor finance, you'll usually need a minimum amount of annual turnover
(usually in the hundreds of thousands range) and your business will need an established
credit history. While this type of loan is harder to get than traditional loans,
it may well be worth the effort if your company qualifies for one.
Inventory Finance
With inventory finance, the lender will pay your suppliers invoices for stock in
advance, and you repay after you have received and sold your stock. The facility
can be used to purchase stock ranging from raw materials to be used in manufacturing,
through to finished products for wholesale or retail. This can be done without any
requirement for real estate security and there is no need for the stock to be pre-sold.
(The stock can be sourced from within Australia or imported.)
Inventory Finance enables business growth and increased profits through an evergreen
revolving line of credit for short-term stock financing. The facility enables you
to purchase stock on extended payment terms that are aligned with your normal business
trading cycle, from 30 to 120 days. It is a great finance solution for businesses
whose financial needs cannot be met by traditional business lending facilities.
Loans are typically available up to $3million and draw downs from $100k.
Through utilising inventory finance, your business is in a better negotiating position
with your suppliers as they are paid in full, upfront and your orders can be larger
and more frequent, reducing freight costs. A further advantage is that by using
this finance your business retains the title to the stock, providing you with full
flexibility in stock usage and sales.
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