This quick, flexible loan product can provide your business with a cash flow solution within 24 hours.
Also called debtor finance, cash flow finance is suited to business owners who need a speedy solution to liquidity problems. Instead of waiting for customer invoices to clear, you can borrow against the value of those invoices and unblock cash flow issues without the need for assets or working capital. This loan from Bank of Queensland (BOQ) doesn't require property as security.
As long as you sell goods and services to other businesses (on credit terms), debtor finance may be a suitable solution for you.
How does the BOQ Cash Flow Finance Loan work?
If your business is experiencing cash flow problems or limited fixed assets, you can use outstanding customer invoices as collateral for debtor finance. Once BOQ has run a credit check to verify your business's financial status, it can lend up to 80% of the total value of the outstanding invoices (with the remaining 20% funded once your customers have paid).
This way you can carry on running your business and filling orders without waiting the standard 30 to 90 days for customers to pay their invoices.
Features of BOQ Cash Flow Finance Loan
Business owners interested in this loan type can benefit from the following features:
- Variable funding level. Debtor finance is linked to your account receivables, meaning that the amount for which you're eligible grows with your business's profits and production capacity.
- Quick turnaround. While an invoice is paid within 30 to 90 days, this loan type provides cash within one business day. BOQ will lend up to 80% of the total invoice value and then pay the remaining 20% once your customers' invoices are paid.
- Increased savings and profits. By borrowing against outstanding invoices, you avoid having to dig into business savings and profits to plug financial holes.
- Loan purpose. This loan can be used for any business-related purpose. Business owners usually apply for this loan type to expand operations by purchasing more stock, filling orders or bringing on additional staff.
- Interest. You repay this loan with a variable interest rate. The base rate for debtor finance is 8.89% p.a.
- No property required. You don't have to use your residential or commercial property assets to secure this loan.
How much does the loan cost?
Here are some of the fees you will be required to pay:
- Application fee. This fee is determined once you submit your loan application.
- Merchant service fee. This fee is equal to 2% of the transaction amount.
- Credit check fees. You will be charged a fee of $20 per enquiry for credit reference checks. A fee of $40 per enquiry applies for multi-score credit reference checks.
- Switching fee. A fee of $300 is charged if you switch from one loan type to another, or if you request to change interest periods.
How to apply for BOQ Cash Flow Finance Loan
You can submit your application for BOQ online. You'll be asked to provide details about your personal and business finances, following which BOQ will run a credit check to ascertain your business's financial health. BOQ will then decide how much to lend your business and deposit funds into your account within 24 hours.
Besides proof that your business can repay the loan, you will be asked to provide the following information:
- The names of all account signatories
- Names, addresses and personal information of all company directors
- Identification (driver's licence and/or passport)