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Invoice financing explained by Fifo Capital

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From time to time cash flow is a challenge for most businesses.

Providing credit terms to customers then waiting for payment can put a strain on working capital. Unfortunately, operating costs don't wait. Staff can't wait and creditors may be pressing, or it could be that access to capital is required quickly to invest in the business.

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

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

Here’s how invoice financing works

Assume that a client has just been invoiced to the value of $50,000. After looking into the credit worthiness of the customer, Fifo Capital purchase the invoice. Fifo immediately remit 90% of the invoice face value and the balance is paid, less the fee, when the client settles.

Typically this entire process could take 24 hours. However, for repeat transactions the turnaround might be as little as two hours. At any stage, the amount of paperwork is negligible. Fifo Capital prefer to meet with customers for the first transaction but after that Fifo do not expect any more contact than a fax providing the details of the invoice that is to be financed.

Fifo Capital 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 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 Capital is dedicated to providing businesses 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

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