Invoice discounting is short-term cash flow funding for your business using your invoices that have not reached their payment date yet. In a nutshell, invoice discounting is the smart way for businesses to immediately access money you have earned, but because you have given your customer payment terms, you will only get the money later.
An increasingly popular way of accelerating your cash flow.
Invoice discounting is not a loan at all. It creates no debt on your balance sheet and you are still able to apply to another lender or a bank for a loan.
Unlike a loan, we purchase a current asset of yours (an invoice) at a slight discount and pay you immediately to maximise your cash flow. The money is yours to use immediately, to grow and run your business.
Companies that benefit from working with Growth Finance have annual turnover of as little as R1 million or as much as R50 million. Let’s face it, which business does not thrive on ready access to cash flow?
Some considerations in assessing if invoice finance is appropriate:
Our funding is not suitable if your customers consistently pay very late because it becomes difficult for you to estimate and manage the financing costs.
Invoice discounting is used for two main reasons:
1. You want to grow your turnover and secure new clients.
Entrepreneurs want turnover to grow. After all, growth is an important measure of business success.
Invoice discounting is a great fit for businesses looking to grow their sales because this funding literally grows alongside your turnover.
Giving your B2B customer time to pay for your products is an important yet simple change you can make to increase sales. Giving payment terms lowers your barrier to entry into new markets and creates trust with your customers. Giving customers time to sell the product they purchase from you before paying you for it makes them feel more comfortable trying new products or making larger purchases.
The challenge for you is waiting for your money.
If a strong customer would respond well to payment terms, let us mobilise your cash flow while you wait to be paid.
2. Payment terms are placing strain on your cash flow
Invoice financing is a great fit for companies that offer long payment terms or experience irregular expenditures. For example, a client of ours buys timber during the dry season to use in the wet months when their logging supplier cannot reach the timber lands.
Invoice financing allows you to unlock cash from your invoices immediately to:
Yes! That’s one of the best parts about using Growth Finance – you only sell invoices when you need cash flow. We are a true, “use it when you need it,” service. Unlike banks and many commercial funders, Growth Finance, does not require you to commit to a specific number or value of invoices to finance.
You are not forced to factor your whole debtors’ book either.
Simply sign up, and when you are ready, upload an invoice you would like to sell us, we will confirm it with your customer and your funds will be in your account the same day they confirm.
Unlike banks and some other funders, Growth Finance never asks for payment when you are not using the service.
Our risk approach. Whilst the size of your business is also important to us, we focus on the creditworthiness of your customers. Picture it like this. If your business has not had time to build its own balance sheet, then we can create a funding facility for your business based on the creditworthiness of your customer! Makes a lot of sense, doesn’t it?
We are Commitment-Free. We do not tie you into financing all of your invoices through us for a 1, 3- or 5-year contract period.
We have NO Facility Availability Fee because we don’t think you should pay for finance during times you don’t need it. How many invoices and when you sell is completely up to you and we do not charge you a facility availability fee.
We have NO Admin fees – We do not charge you a fee to issue your invoices, capture your invoices to our system, confirm your invoices with your customers or receipt payments from your customers – after all, that’s our job!
We DO NOT charge, “a little here and a little there” plus a % on the funding and a facility availability charge, all of which will ‘do your head in’ when you try to calculate the actual cost of invoice funding.
We DO charge one single, transparent, daily fee which covers everything we do for your business. It could not be simpler to work out your cost of funding to confirm that you are getting a great deal!
Growth Finance can assist your business if you:
The documents you will be asked to upload to our secure platform in the application process will include:
If you can’t supply one or more of the necessary documents, then don’t quit, we can usually suggest an alternative – just ask us.
Our application form is completely online and it will take you 6 minutes to complete. (trust us, we’ve tried!)
Once you have completed your application form and uploaded your documents, we will let you know if we can help within 24 hours.
We’ve worked hard to make the application process simple and straightforward. There are two areas you have to cover:
Within 24 hours of receiving your complete application, we will contact you to introduce our funding solution, discuss your credit limit and our costs. If you are happy, you sign our agreement and we are ready to provide funding against your first invoice.
If you prefer email and paper, then we have you covered. Please contact us and we will email our application form to you.
You are also welcome to email us your supporting documents. We will let you know what we need from you when we have received your application form.
It depends.
We are more interested in your approach to obligations and tough times. So, if your business went through a rough patch and has a default judgement or adverse payment listing, did you approach your creditor and make arrangements to settle the debt? Are you sticking to your payment arrangements? If so, then the original judgement or adverse payment listing is not a deal breaker for us. We will then view your application on its merits.
If your business is a (Pty) Ltd or a CC registered in South Africa, then we do not need your business to be registered as a VAT vendor to make your application.
We do require your business to be compliant in all respects with SARS.
Once you have accepted our funding offer, one of our client-facing staff will visit you at your business with your legal agreement to sign.
At Growth Finance, we have made the process as simple as possible for you. To create cash flow from your invoices, you follow these simple steps:
Usually within 1 to 3 days of us receiving your application pack, you are able to offer us invoices. Once your customer confirms your invoice, we pay out on the same day.
Yes. The first time you sell us an invoice for a particular customer, you send that customer our standard communication and let them know you are working with us.
Invoice discounting has become so widespread and popular as a way of funding business growth, that a growing number of corporates have established invoice discounting departments to deal with invoice discounting. We will never contact your customer without your prior consent.
The first time you sell us an invoice for your customer A, we ask you to send customer A our standard communication to let them know you are working with us. Each time we finance an invoice for you, your customer will be prompted to confirm the invoice.
Growth Finance asks your customer to confirm the following about your invoice:
It depends. If you only want to finance one invoice (or one batch) and the invoice is already with your customer, then we do not expect you to re-issue this invoice. We will pay out as soon as your customer has confirmed the required information.
If you want to finance more than once through Growth Finance, then your invoices to the customers you want us to work with must have Growth Finance’s bank account details on them.
Easiest to explain this one with an example: if we finance some of your invoices to customers A, D & E, then all your invoices to customers A, D & E will need to carry only Growth Finance’s banking details.
This enables us to receipt all payments from customers A, D and E, charge our fees only on the financed invoices and pay the the net amount to your business bank account on the same working day.
We finance invoices issued to other companies in South Africa. We also work with invoices for exports to certain countries. Please enquire about this with us.
We only finance invoices for goods and services that have already been delivered. We don’t fund invoices that are issued in advance of your goods being delivered, for example invoices for a materials deposit.
Your invoice should not be past its due date yet. For example, if your invoice was supposed to be paid on the 31st August 2020 but it is already the 10th September and the invoice is still unpaid.
We finance invoices with payment terms of between 14 and 60 days.
Your invoice should have clearly written on it:
An invoice must not have:
Yes, please send us the order document such as the PO (e-mail is suitable), proof of delivery and receipt such as freight delivery notes, Goods Received Voucher (GRV) or delivery notes etc.
We cannot work with any of your debtors that have delayed payments to you for longer than 30 days in the past. Late payers place you, your business and Growth Finance at risk.
We don’t finance invoices issued to private individuals.
From time to time, there are industry sectors that we will not work with due to overconcentration, but we will let you know this when we work together.
Your customer / debtor must:
Depending on the circumstances Growth Finance can advance up to 80% of your invoice value to you immediately. The other 20%, minus our fee is paid to you when your customer pays the invoice to Growth Finance on the due date.
You register your business with us and secure your credit limit absolutely free, giving you complete peace of mind knowing that when you need us, we are there for you.
Growth Finance only charges you for invoices that you discount with us. There are no other fees or expenses.
Our fees range between 0.18% and 0.22% per day of the amount we advance.
There are no ongoing subscriptions or other fees whatsoever, making Growth Finance’s pricing the most transparent in South Africa.
You are in complete control of the two main cost levers – Time and Advance Amount.
Time:
Our clients draw down on their available funds when they actually need the funds. Remember there is no charge until you draw your available funds. If you have surplus funds e.g. another invoice settles early and you would like to settle us early, no problem – we have a minimum 14-day fee, but no early settlement penalties.
Advance Amount:
Depending on the circumstances, we advance up to 80% of your invoice value. This does not mean you have to draw the full 80%. If you only need 40% of the amount, then you only draw the 40% you need.
REMEMBER: Funding Cost = Time multiplied by Advance Amount. You control both!
We offer a financing limit of between R150,000 and R2,000,000 on a revolving basis, meaning that when you reach your credit limit, we are able to re-advance funds as soon as your customers settle any of the invoices we have financed for you.
Insights, tips and more to help you grow
EMAIL: info@growthfinance.co.za
CALL: +27 (0) 21 680 5322
