The term “selective” refers to the fact that you can choose one or selected invoices to “bridge”.
An alternative to selective invoice factoring, is to factor / discount / bridge your entire debtors book.
A full management and debt collection service is offered in this case.

Selective Invoice/Cheque Discounting works on the basis of the following:

• The Invoice is essentially “bought” from you after the goods have been delivered and /or the service has been performed.
• 75 % of funds due on outstanding invoices/orders is advanced to you
• 25% is held as retention for the purpose of security and paid out to you (less costs) once your client / debtor settles his account.
• A monthly discounting fee of up to 5 % (depending on the risk and debt) is levied
• A once-off set up fee of up to 3 % (which is dependent on the deal size) is levied.

The bridging company may also take additional security in the form debtors insurance. Other types of security such as property can be offered.
There may also be a specific amount, agreed upon by both the discount house and yourself, which is taken out of the initial deal and paid into a separate bank account in your name and ceded to the discount house, to be used in the event of a default by a debtor.

This will only apply to the first deal, all further deals will be paid out at the full 75% of invoice value. Added to the security structure is the fact that cession of your debtor`s book and security cheques made out for the full invoice worth, will also be required.

Alternative types of bridging finance available to assist with cash flow are :

Inventory Finance : If you have secured an order from a client and need to fund the purchase of the goods to be supplied, then Inventory Funding can be arranged. This includes the import of goods / equipment from overseas.
Motor Dealership Floor Plans : Motor dealers who need to re-finance cars on their showroom floors have access to bridging finance for dealerships.
Property Equity Release : The equity in property can be unlocked if the value is higher than the current bond. Minimum deal size R500 000
Developers Bridging : Where a development loan is in place ( from a bank) and pre-sales on property development have been secured, bridging finance programs is available.