For most business from time to time, cash flow is a challenge.

If your company provides credit terms to customers then waiting for payment can put a strain on your working capital. Unfortunately, your operating costs don't wait. Your staff can't wait and your own creditors may be pressing. Or it could be that you need to access capital quickly to invest in your business.

There are a number of traditional sources of increased working capital - your bank may extend your overdraft or you may make some more formal borrowing arrangement. Fifo Capital offers an effective solution that requires no change to your current financing arrangements, and unlike bank debtor financing, there is no requirement for a registered charge over your company's assets.

It's called invoice financing. It provides a flexible source of working capital that is linked to your company's current receivables rather than the value of your fixed assets or the strength of your balance sheet, and is particularly suitable during periods of strong growth and seasonality.

Here’s how it works

Assume you have just invoiced a client to the value of $50,000. After looking into the credit worthiness of your customer, we purchase the invoice from you. We immediately remit 90% of the invoice face value into your account and the balance we pay, less our fee when your customer settles.

Typically, when we first do business together, this entire process could take 24 hours. For repeat transactions though, the turnaround might be as little as two hours. At any stage, the amount of paperwork is negligible. We prefer to meet with you for the first transaction. After that, unless you would prefer, we do not expect any more contact than a fax providing the details of the invoice you would like us to finance.

Fifo Capital financial services franchise specialises in transactions from $5,000 to $250,000 and either single or multiple transactions - whatever meets your immediate requirements.

Who uses invoice financing?

Fifo Capital business services franchise works mainly with small and medium businesses that are in growth mode or which for a variety of reasons need short-term cash to meet typical expenses such as wages or creditor payments. Building contractors, printing firms, advertising agencies and engineering businesses are common examples.

Fifo benefits

Fifo Capital is dedicated to providing your business with a rapid, simple and totally reliable source of working capital. Fifo Capital offers:

• Immediate decisions
• Total transparency
• Very simple paperwork
• First time transactions processed within 24 hours and within 2 hours for repeat transactions
• Single transactions (no long-term contracts required)
• The option of non-disclosure to your debtors
• 24 hour accessibility
• No liquidity or other financial ratio tests

Is invoice financing a new business?

Invoice financing or ‘factoring’ as it is some times known has been around for many years, especially in Europe, North America and Australia. In New Zealand also, it is well-established and a reputable source of short-term funding for many successful businesses.

If I use invoice financing, will my customers think that my financial position is unsatisfactory?

No. Invoice financing is so widely used that it would not be uncommon that some of your customers already deal with other clients using invoice financing. However, if confidentiality is a matter of concern, we also offer undisclosed financing. This simple option is unique to Fifo Capital.

What are your fees?

Our fees are based on a sliding scale that is disclosed to you upfront so there is no misunderstanding or surprises. They range from 2.5% of the invoice value and increase depending on how long it takes to collect the payment from the debtor. There are no documentation or administration fees.

Can I factor my consumer receivables?

No, we only deal with business-to-business transaction.

Will you collect my old accounts?

No, we are not a debt collection agency.

What if an invoice I sell you does not get paid?

In this rare circumstance (and they are rare as we do our own credit searches), you will repurchase the unpaid invoice from us and then collect it yourself or hand it to a debt collection agency to collect for you.

Must my business meet net worth, profitability, debt coverage, years in business or other financial ratio requirements?

No. Most of our investigation is with your customer as it is they who will pay the invoice.

If I use Fifo Capital, can I still borrow money from other sources?

Yes. Remember, we are not lending money; we are purchasing an asset (account receivable) from you. Our service does not affect existing or future funding lines.

What if I have already borrowed from a bank – can I still finance my invoices?

Yes – in fact Fifo Capital works alongside many banks that will refer their clients to us as a preferred short-term funding option.

If your company has creditworthy trade debtors and your invoice represents a product of service already provided, invoice financing is an ideal working capital solution.