Results 1 to 1 of 1

Thread: Cash flow help for business

Threaded View

Previous Post Previous Post   Next Post Next Post
  1. #1
    Suspended
    Join Date
    Nov 2007
    Location
    South Africa
    Posts
    180
    Thanks
    10
    Thanked 29 Times in 21 Posts

    Cash flow help for business

    SELECTIVE INVOICE DISCOUNTING/BRIDGING
    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.

  2. Thanks given for this post:

    padgettcalgary (05-Jul-17)

Similar Threads

  1. Loyalty programs - are they worth it.
    By Dave A in forum General Business Forum
    Replies: 16
    Last Post: 16-May-13, 10:00 AM
  2. INTRODUCING HOLIDAYS AND CASH ( MLM)
    By faye74 in forum MLM Industry Forum
    Replies: 15
    Last Post: 03-Jan-10, 09:52 AM
  3. Proper Inventory Control
    By sgafc in forum Entrepreneurship and Business Management Forum
    Replies: 0
    Last Post: 25-Mar-09, 12:38 PM
  4. [Question] Saving on Cash Deposits ???
    By Rob in forum Business Finance Forum
    Replies: 4
    Last Post: 30-May-08, 12:25 PM
  5. cash basis taxation
    By duncan drennan in forum Tax Forum
    Replies: 5
    Last Post: 22-Jan-07, 11:17 AM

Tags for this Thread

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •