Hi, I have recently started looking at various options to manage cash flows in my business and doing a lot of research into the different products available. I am starting to understand the differences between invoice financing and overdrafts and line of credits.
Does anyone have any recommendations on brokers they have used or product they are using.
Ideally, we want a facility that we pay for only when we drawdown on it. For eg: we don't want to establish an overdraft facility for say, $500k and pay $5k a year for something we may not use at all or we may drawdown $10K for 2 weeks in the year.
Invoice financing looks more promising, but none of the websites are transparent on the fees they charge; hence asking if someone is using a facility that they would recommend.
Cheers.
Invoice financing (factoring) is basically just like an overdraft facility in that as you pay interest on the amount drawn on the bank overdraft, you pay a factoring interest cost on the amount of the invoice. At a guess it would be 13%-15% pa, am happy to be corrected.