If you are unable to meet loan and credit requirements through traditional methods, invoice finance can be the right option for you. Invoice finance allows you to fund a specified amount and pay it back over a specified period of time. With invoice finance you typically need to apply for funding, and then wait for approval. The majority of traditional invoice schemes require a minimum deposit, and a credit report check. This can often hinder you from getting the funding that you need. If the customer does not repay the invoice finance facility NZ, the lender does not go after them for money beyond the amount of the facility.
With invoice finance companies you can apply for funding to pay invoices in a single easy payment. You do not need to provide information about your credit history or other factors that might affect your approval. You can apply to a number of factoring companies and choose the one that best meets your needs. Single invoice finance companies can process a large number of invoices at one time and typically have access to a greater variety of loans and factoring products than traditional banks and financial institutions. With single invoice finance you can choose which invoices you wish to pay on a case by case basis without any long term commitment.
Another advantage of invoice finance is the ease of programmatic access that it provides to lenders. Loan amounts and repayment terms can be set up within just a few hours, and often with immediate online access. Once an application has been submitted it can be reviewed within a matter of minutes and, if approved, funds can be deposited into your bank account. Depending on the lender you use, the funds can be transferred out very quickly, making it much easier for you to manage your cash flow. Invoices can also be automatically converted from your debit cards to your credit cards, which further reduces errors and administrative hassle.
A third advantage to a single invoice finance facility in New Zealand is the lender-customer relationship. In a traditional financial institution, a bank loan officer will approach a potential client and discuss their needs. After evaluating that person's credit history, the bank will then determine if they are a good candidate for a loan. If they are not, the bank will then discuss a possible solution, such as a bad debt protection arrangement (BDA).
Bad debt protection agreements are used in conjunction with an invoice finance facility NZ, because unlike traditional loans and mortgages, BDA agreements do not require recourse as a condition of the loan. If a customer defaults on their finance facility, the lender cannot go after the customer for additional payment beyond the balance of the loan. Non-recourse agreements work in the same manner.
A fourth advantage to invoice finance facility NZ is the ability to improve cash flow through better management of working capital. An increase in the efficiency with which an organization uses its working capital provides a number of benefits. These benefits include improved profit margins due to the reduction in the cost associated with increased inventory turnover. The decrease in excess inventory as well as the resulting increase in productivity can lead to improved customer satisfaction and increased profits.
One other advantage to invoice financing is the ability to effectively reduce the cost of invoicing. The elimination of duplication in the preparation of invoices provides the opportunity to create multiple, more efficient accounts payable processes. This results in the elimination of the need for expensive credit insurance and reduction of costs associated with duplication of services. invoice finance facility New Zealand can also help improve the efficiency with which billing occurs. If the process of invoice consolidation is properly managed, a significant reduction in the cost of invoicing can be achieved.
Invoice finance is a very effective method of securing a stable financial future for small businesses. The flexibility provided by this financing option allows organizations to meet their short-term cash needs at a low cost over a longer period of time. Invoice Factoring NZ offers customers peace of mind when dealing with cash-constrained businesses. It also enables businesses to maintain a healthy cash flow that is necessary for maintaining long-term profitability.