Small businesses rely on invoicing more than almost any other line of business finance. For this reason many businesses consider contracting out small business invoice factoring NZ. However, there are many differences between invoice factoring and traditional bank financing. Here is a look at the differences and how invoice factoring solutions can help your business.
Small business invoice factoring NZ is often known as accounts receivable factoring. Accounts Receivable Factoring (ERS) is an alternative business finance solution that has been designed for small business owners. It enables small businesses to deal with an unexpected rise in invoicing obligations, facilitate smooth out some uneven cash flow, cover for an impending slump in quarterly or yearly sales, or fund additional growth. This financing option is perfect for new businesses that need to meet invoice obligations but have limited funds. The best way to get started is to find an invoice factoring expert in New Zealand.
When it comes to small business invoice factoring, you can be rest assured of finding experienced lenders. In fact, you can find dozens of companies just waiting for you to give them your business information. Typically, these factoring companies will require you to send your balance sheets and other financial documents. Then, they will evaluate these documents to assess your ability to pay invoicing debt. After all of this information is assessed, you may receive a quote from one or two factoring companies. Depending on your personal circumstances, you may be able to obtain working capital from one of these companies in the amount of your invoicing obligations – and nothing more.
Small businesses often struggle when it comes to finding an appropriate factoring firm to partner with. In fact, the majority of small businesses struggle with this decision – as most small businesses’ invoicing responsibilities are so sensitive that they simply do not want to mess up on this step. However, once you discover a small business invoice factoring NZ expert that offers you a fair quote, you will want to explore your options. What do you need to consider?
First, there is no magic equation to determine whether you should use a factoring expert or a traditional bank lender to obtain your invoices. As previously stated, small business owners’ invoicing responsibilities are so sensitive that they simply do not want to mess up on this step. However, the process of obtaining financing from a traditional bank can be frustrating, and it typically involves meeting with at least three representatives from different factoring companies before you are approved. This process can be time consuming and tedious. In addition, if you do not have a perfect credit score, you may be told that you need to raise your credit score in order to qualify for this type of financing – which could further delay your start up of a new small business.
Second, the fees associated with invoice factoring agreements can often be less expensive than the fees associated with traditional bank loans. Depending on the type of factoring agreement you enter into (such as a monthly bill factoring arrangement versus a loan factoring agreement), the fees typically range between one and two percent of the face value of your invoices. Although some factoring agreements charge higher percentages of your outstanding bills, there are also many that charge much less.
Finally, small business invoice factoring NZ companies can often provide a better turn around time for you. Many invoicing companies specialize in factoring work for small business owners, and they can quickly create a customized contract that will pay your invoices quickly and provide the funds you need to pay your invoices promptly once your invoices begin to climb. Often, these specialized factoring companies can provide you with the funds you need within hours. This can allow you to pay down your debt and begin rebuilding your business before you even have the chance to notice the positive results of the loan or factoring agreement.
Invoice Factoring Solutions is one of the leading providers of online small business loans. With an internet application process that takes only a few minutes to complete, our customers can access the money they need through our secure online funding source. If you are in need of immediate funds for your business, we urge you to consider using our easy and effective online factoring solution. Our expert debtors and lenders offer low interest rates and flexible payment options to meet all of your small business finance needs.