Once Off Cost
Once off set up fee of approx 3 % to 5 % depending on the size of the invoice bridging required. Monthly cost of between 4,5 % and 6 %. You elect to bridge one or a few invoices not the entire debtors book.
Pre-Conditions to Discount
The goods /services must have been delivered / rendered and the customer must have accepted the goods / services with no pending disputes. The company requesting the bridging should be profitable and have a clean credit record.
Invoice Factoring
This is a very simple and reasonably quick method (within 2 weeks of receipt of all documents) used by businesses to improve cash flow or working capital as and when needed. There is no lock in period and no penalty for early settlement.
FAQ's
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Can an individual get bridging finance for invoices?
Generally not as it is mainly aimed at assisting businesses and corporates that have audited financials and management accounts. -
How long does it take to set up?
Approximately 2 weeks from when all supporting documents have been received. -
What is the downside risk to me?
If your customer / debtor does not pay the bridging company what is due, then you will have to settle the outstanding amounts. There is always full recourse to you the borrower. -
What is the smallest amount I can bridge?
R 40 000 is the smallest amount that is economically feasible. -
What is the largest amount I can bridge?
There is almost no limit to how much can be bridged. -
What types of invoices can be bridged?
Both products and services related invoices where the products has been delivered or the service rendered. -
When can I not factor (bridge) an invoice?
If there is still work to be performed (products to be delivered or services still to be rendered) then an invoice cannot be discounted / bridged. In this circumstance it would be a working capital loan application, which is a totally different form of funding. One can also use Full Debtors Book discounting where bridged capital can be used to fund work in progress.(see below) -
There are however two main costs
1. Admin fee to set the process up: 2) Monthly interest charge. These will be shown on the final contract which is presented to you for consideration. -
How much can I get?
UP to maximum of 80 % invoice value immediate and balance ( less discounting costs) once your client settles his account.