Invoice Factoring

One of the ways of securing a small business loan in South Africa is through invoice factoring. Invoice factoring is a potent cash flow tool for companies issuing invoices more than R 100,000 per month and with credit payment terms from 30 to under 120 days.

Invoice factoring assists the business owner to access funds on the invoices raised today.

The invoice factoring company also assist you with the following additional services, to ensure low-risk debtors for yourself and them:

  • The opening of new account receivable accounts
  • Ensure that the credit applications forms are completed thoroughly
  • Do all the credit checks needed
  • Assist with sending a reminder and final demand letters out to the customers.

Some of the requirements are the following:

  • The business must trade-in a Company (Pty Ltd) or a Closed Corporation (CC) and may not be a sole proprietor.
  • The invoices must be B2B. (from one business to another, and not individuals)
  • The turnover must be at least R 100,000 per month.
  • Credit terms must be applicable between 30 and 120 days. The terms may not be more than 120 days.

To assist you in making sure your Invoice factoring application is stress-free and potentially successful, we compiled a checklist for you below:

  • The latest financial statements
  • If the business has not traded for a full fiscal year, yet the management statements for at least six months need to be provided.
  • Bank statements of the business account for the last six months.
  • Company registration documents
  • Copies of IDs of all directors.

We trust this checklist will assist you with your finance application.