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Debtor Finance Blog

ARE YOU OUTGROWING YOUR BANK OVERDRAFT – OR OUTRUNNING IT?

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Overdrafts under scrutiny

There’s nothing new about Bank Overdrafts. They’ve been around forever, and they are a traditional method by which small businesses have sourced the funding they need to function effectively. However, there’s a problem with Bank Overdrafts that’s at odds with your plans for business success. The fact is, the harder you work, the better you become at building your business turnover…the faster you’ll outgrow your overdraft.

Things stop working properly because of the ‘bank’ part of the term ‘Bank Overdraft.’ Not to bash the banks, but the fact is they don’t react quickly enough when you need help with cashflow funding. When you have bills to pay and a business to run, the last thing you need is a drawn-out application process for an increased limit on your overdraft, weeks to wait, and the concern that after all that hassle the answer could still be ‘no’. Not enough equity in your property can mean no extension on your overdraft. In a volatile and fast moving business world, it just isn’t good enough.

Speaking of volatile, when it comes down to it, obtaining a Bank Overdraft is of course borrowing money against your property. Nobody wants to think about it, but if you had a bad business run, your house would be on the line. There’s no peace of mind in that situation at all. .

Debtor Finance – quickly accessing cash without borrowing.

At CashFlow Advantage we’ve seen many cases where businesses have quickly outgrown their Bank Overdrafts, and have been consequently unable to access an extension quickly enough – or at all. The amount of equity you have in your house restricting the funds available to your business doesn’t necessarily make a lot of sense..

In our opinion, Debtor Finance can be a very appealing and practical alternative for a number of reasons:

  • The security of a Debtor Finance facility is based on your debtors’ ledger. As your business grows, so does your Debtor Finance facility;
  • There’s no need to put your family home on the line; .
  • The time from application to approval can be as little as 24 hours, compared to waiting weeks on a bank.Debtor Financing is very simple, and based on money owed, not money borrowed. When you raise an invoice, you simply copy CashFlow Advantage in on the invoice, and we will advance up to 80% of the value of that invoice to you within 24 hours. The remaining 20%, less a small fee, is paid to you when we receive payment from your client. We handle all the accounting and administration. You don’t have to submit each and every invoice if you don’t wish to – you can submit as few or as many as you please. You’re not borrowing money, you’re simply accessing the cash that you are owed for goods or services. So you can access the funds you need to keep your business moving ahead, without putting your family home at risk. Don’t let a bank slow your business down.While banks are a necessary part of some business dealings, today there are better ways of improving business cashflow than relying on a Bank Overdraft. It’s no business secret that banks can be slow to help, with poor levels of service and a mountain of paperwork required before anything at all happens..At CashFlow Advantage we love small business. It’s the engine room of the Australian economy, fuelled by the hard work of people who put everything into building their business dreams. We think that sort of dedication deserves a shot in the arm, not a series of stumbling blocks. With that in mind, Debtor Financing – access to cash based on your earnings, rather than your family home – simply has to be a smart idea. 2013 is the year to stop borrowing and start growing! CashFlow Advantage is a Factoring specialist dedicated to helping small businesses grow by eliminating the wait between invoicing and payment. Our methods are straightforward, completely transparent, and could make all the difference in how your business performs this year. Simply phone 1300 557 771 to speak with one of our Consultants.