Factoring is a financial facility that helps improve a company’s cash flow. There is an old saying, “companies live and die by their cash flow.” Factoring can be disclosed or undisclosed. Both facilities improve the company’s cash flow.
Construction factoring is normally not available due to progress claims and retention.
An ideal business suitable for factoring needs to sell on credit terms on a business to business basis (B 2 B).
Suitable industries include:-
- Courier Companies
- Transport – Owner operators, bulk or specialized
Can be up to 80% of approved receiveables, however every application is assessed on its merits.
Funding can be used to recapitalize the business, restructure funding arrangements, fund creditors, or, fund ATO and other creditor payment arrangements.
Both bank and non-bank factoring available.