Banks prefer borrowers with a stable and strong business. What problems do borrowers commonly face?Ī common problem borrowers face is not identifying underlying issues with their business. Also note that some lenders may not accept your YTD income from MYOB. You can also use projected cash flow statements.
What can I use to prove my business income?Īs with any other business loan, banks will conduct a full assessment of your business income.
Call us on 1300 889 743 or complete our free online assessment form today. If you’re not sure how much you can borrow, you can speak with one of our factoring and business loan specialists. You’ll have to apply with a specialist lender though. However, if you can prove that you’re a strong business with low risk, you may be able to borrow even as high as 90%.Ī reputable and strong business can borrow up to 90% even with a bad credit history. Generally, you can borrow up to 85% of your outstanding invoices with most banks. Smaller specialist lenders may have more flexible requirements but the costs may be higher. However, there are exceptions to this especially if you’re a strong business. It should also be noted that lenders prefer borrowers with a good credit rating. If you don’t have history with the bank, you may need to provide security against the loan.Your debtors ledger and credit assessment system are highly efficient.Lenders prefer businesses that have little to no trade disputes.Lenders generally reject retailers or contractors that receive stage payments.Your invoices must not be older than 90 days from the last day of the month of issue.
This way, risk isn’t centralised on one or a couple of debtors.
In factoring, the credit control function is outsourced to the lender. There is one distinct difference between factoring and invoice discounting.
By accessing money already owed to them, they can also create additional working capital. This can help businesses improve their cash flow position. Unlike invoice discounting, the debtors here are aware that you’ve taken a factoring facility. What is factoring?įactoring is the purchase of trade debts of a business by a lender (factor) on a continuing basis.
Find out why and how you can get approved. Unfortunately, it may be difficult for some businesses to qualify. Here, funding can be secured without the need for additional assets. This is simply banks extending credit against money that you’ve been owed. More and more small-to-medium (SME) businesses are turning towards it. We apologise for the inconvenience.įactoring or invoice factoring is a common form of debtor finance. Note: We are only accepting applications for business loans with a minimum deposit of 50%.