Mortgage Language Lessons - Invoice Finance

Our latest instalment of Mortgage Language Lessons covers Invoice finance. Read on for the what, why, and when.

Invoice Finance: Could this be the ingredient your business needs?

As I'm sure you're aware many (even highly successful) businesses are often at the mercy of their customers' speed at which they pay invoices. Some business operate on 30 day terms or even less, meaning that their customers are required to pay an invoice with 30 days of it being issued. Other businesses have payment terms that extend out to 60 or even 90 days.

This can be for a range of reasons e.g. a high cost of an individual order or simply that their customer is a very large business and can dictate terms to its suppliers. Clearly, there are a number of factors that can slow down a company's cash flow and that's before we start talking about late payment or even non-payments.

When a company is tight on cash flow this can lead to all sorts of problems such as not being able to buy the next batch of stock, not being able to purchase new plant and equipment or having to delay entering into the next exciting growth market - among many others.

Enter Invoice Finance.

This is where a lender will have a look at the invoices owed and offer to lend based on money owed to businesses. Put another way, a lender will provide finance based on invoices that have been issued but have not yet come due. Lenders (including the big banks) could lend up to 85% if invoices owed and when the invoices are paid, the debt is reduced.

Often this results in a rolling facility that ebbs and flows with invoices being paid. It is a great way for a business to make use of opportunities that it would otherwise not be able to due to a strangled cash flow. These loans usually involve no security (i.e. don't require property to back the loan) and can grow as the business grows. The borrower usually retains complete control of the invoicing and collection process as well.

Are you business owner seeking an invoice finance product? Or an investor looking to get into the property market? Let us know!

Please let us know if we can help in any way to get your commercial property finance needs taken care of. Are you looking to purchase commercial or industrial property within Australia and require bank, non-bank, or private financing? CapStack can help. Are you a property developer looking for project finance to get your site moving? We can help assist you source finance. Are you a or property investor looking to purchase your next asset? Start here to connect with is and send though some basic information to get the ball rolling or email us directly. We work with lenders Australia-wide ready to fund investments and development projects. This is where CapStack comes in.

CapStack works alongside Australia's most active lenders from across the board. We help developers and investors fill their capital stack by providing access to the capital puzzle piece they are missing. CapStack works directly with developers and investors who need access to capital markets.

How can we help you with your finance needs or those of your clients? Give us a call or start here.