Accounts Receivable Financing Australia
Turn unpaid invoices into working capital for your business.
Maintaining a healthy cash flow is a priority if you want your business to succeed. Accounts receivable financing, also known as AR financing or invoice financing, offers an efficient solution to unlock cash tied up in unpaid invoices. This way, you can get the working capital you need to operate and grow your business.
What Is Accounts Receivable Finance?
Accounts receivable financing is a financial solution that allows businesses to receive upfront cash by accessing a portion of the value of their unpaid invoices. With AR financing, you can borrow up to 85% of the value of your invoices. Once the invoices are paid, the lender subtracts their fees from the remaining percentage and returns the balance. This type of financing is ideal for companies looking to bridge cash flow gaps caused by delayed customer payments.
Quick Enquiry!
Key Benefits of AR Financing
- Improved Cash Flow: Access working capital without waiting for invoice payments.
- Quick Approval: Faster access to funds compared to traditional loans.
- No Security Required: The invoices act as the primary security.
- Growth Opportunities: Use the cash to seize business opportunities or expand operations.
What is the Difference Between Receivables Financing and Receivables Factoring?
While invoice financing and invoice factoring are similar, they serve slightly different purposes and operate in distinct ways:
- AR Financing: This is a loan-like arrangement where businesses use their unpaid invoices as security to borrow funds. The business retains ownership of the invoices and is responsible for collecting payments from its customers.
- AR Factoring: In this arrangement, businesses sell their unpaid invoices to a factoring company at a discount. The factoring company takes over the responsibility of collecting payments from the customers. This can reduce administrative workload but involves relinquishing control of the receivables.
Key Benefits of AR Financing
AR financing and inventory financing are two distinct types of loans that help businesses operate smoothly. Here’s how they differ:
- Accounts Receivable Financing: Borrows against the value of outstanding invoices to secure funds.
- Inventory Financing: Business loan or line of credit solution that allows businesses to purchase inventory
What Is a Receivables Fund?
A receivables fund is a pool of capital managed by a financial institution that invests in the purchase of accounts receivable from businesses. These funds provide companies with immediate cash in exchange for their unpaid invoices. Once the invoices are paid by the businesses’ customers, the receivables fund collects the full payment and earns the difference as profit. This system benefits both businesses seeking liquidity and investors looking for steady returns.
Why Choose Dark Horse Financial for Accounts Receivable Financing?
- We’re committed to providing tailored financial solutions for Australian businesses. Here’s why we’re the right partner for your accounts receivable financing needs:
- Expert Guidance: Our team of experienced professionals is here to guide you through every step of the process.
- Customised Solutions: We offer financing options tailored to your unique cash flow requirements.
- Fast Funding: Receive funds quickly to maintain smooth operations.
- Best Rates and Terms: We ensure you get the best rates and terms for your situation.
- Ongoing Support: From the initial consultation to settlement and beyond, we’re here to help you as your business evolves.
How to Get Started
Getting started with accounts receivable financing at DarkHorse Financial is simple:
- Contact Us: Fill out our online form or call us to discuss your business needs.
- Submit Supporting Documents: Provide details about your business and invoicing.
- Receive Funding: Once approved, access the funds quickly and use them for your business.
Get Funding For Your Business Today
Need funding fast? Access the value of your accounts receivables today and get the cash you need to run and grow your business. Contact Dark Horse Financial today to learn more about our receivables financing solutions.
Quick Enquiry!
Accounts Receivable Financing FAQs
Invoice finance is another name for accounts receivable financing. While they are the same, they shouldn’t be confused with invoice factoring or receivables factoring. Invoice financing works as a type of loan where you borrow against the value of your unpaid invoices. Meanwhile, invoice factoring involves selling your unpaid invoices to a factoring company.
Businesses with long payment cycles or those needing immediate cash flow solutions, such as manufacturing, retail, or service-based industries, can benefit the most from accounts receivable financing.
Accounts receivable financing works like a loan, but it’s not the same as a traditional term loan – it’s more a line of credit. A traditional loan involves receiving a lump sum and paying it back in instalments over a defined term with interest. Meanwhile, AR financing involves borrowing against the value of invoices. You receive a percentage of the total value of your invoices, and once your customers pay, the lender takes their fees before returning the balance to you.
The amount depends on the total value of your outstanding invoices and the agreement terms with the financing provider. Most lenders let you borrow around 80% up to 85% of the total value of the unpaid invoices.
Typically, businesses receive funds within the same day or up to 48 hours of application.
This depends on the type of financing. With invoice factoring, customers are usually aware since payments are made directly to the factoring company. With invoice financing, customers may not be aware.
Costs vary depending on factors like the value of invoices, the financing term, and the provider’s fee structure. Generally, fees are a percentage of the invoice value.
