If you have decided that invoice factoring is a smart way to improve your working capital efficiency, you may be at the stage where you’re researching and comparing different invoice factoring companies across South Africa. You may also be considering a factoring solution from a bank – as most bigger financial services institutions offer factoring as part of their broader product range.(Read More).
Companies involved in local or foreign trade often need trade or stock finance to fund the operational cycle. This is because these companies must first pay suppliers for stock and raw materials before producing their goods and selling these to customers. Only once their customers pay, does cash flow back into these businesses.(Read More).
South Africa’s economy has experienced a period of low growth since 2011 due to declining commodity prices, political uncertainty and a range of other factors. This has created a challenging environment for small businesses, although their contribution to the economy remains vital, both in terms of the revenue they generate and the jobs they create.(Read More).
Many smaller companies reach a point where they need additional funding to grow, or meet operational expenses while they wait for customers to pay. These organisations may believe that traditional bank loans and overdraft facilities are the only business finance options that are available to them in South Africa. However, this is not the case at all.(Read More).
A factoring company is a specialised financial services organisation that provides businesses with working capital by purchasing their accounts receivable and taking care of the invoice payment collections on their behalf.(Read More).
A working capital loan is a financing method often used by businesses both big and small to fund short-term operating expenses. These include, inter alia, salaries and pension contributions, office supplies, rent, repairs, marketing costs and travel costs; but mostly unforeseen and/or unplanned major expenditures.(Read More).
Many companies involved in the trading of goods and services, especially small and medium enterprises (SMEs), experience periods during which their financing needs exceed their available working capital. This makes it difficult for these organisations to ensure efficient levels of key stock items, for example, or meet other costs within the operational or trade cycle. (Read More).
A company may find itself in financial trouble due to any number of circumstances. However, given enough time, appropriate guidance, careful management and a sound financing strategy, it is possible to overcome these challenges and become solvent again – with clear benefits for the company’s owners, employees, creditors, shareholders and, ultimately, the local economy. (Read More).
Bridging finance is ideal for the periods where business is slow and business owners struggle to
keep organisations afloat without any revenue.
As the name suggests, bridging finance serves as a ‘bridge’ when a company is anticipating a future cash flow but has current financial obligations to attend to. Bridging finance solutions are a smart alternative to more traditional lenders who have slower turnaround times or are too rigid. (Read More).
Cash flow problems arise when a business does not have enough cash on hand to pay its debts/liabilities as they become due. From allowing customers too much credit, to low profits and a downturn in revenue, find out some of the primary causes of cash flow problems here.
Small to Medium sized Enterprises (SME) are the lifeblood of the South African economy but they are heavily dependent on the banking sector for working capital. Regardless of whether businesses are feeling the slow-down effects of the global recession or are fortunate enough to be caught in an unexpected wave of growth, they all need access to funding. The worldwide credit crunch has affected these SME's with particular voracity. The more restrictive lending criteria imposed by the traditional financial institutions has left many business owners up the proverbial creek without a paddle. (Read More)
Perhaps understandably, the commercial banks have become more risk averse in response to defaults and the financial crisis, resulting in credit facilities taking far longer to be approved, shortening loan maturity, higher collateral requirements, and - in many cases - increased cost of finance. (Read More)
"Cash is King!" We've all heard that many times, especially during the global recession. No one really knows who coined the phrase initially although the most popular theory is that it was the CEO of Volvo back in 1987 after a global stock market crash. Perhaps its origin is less important than its literal meaning - having millions tied up in accounts receivable but no cash to pay creditors and staff is a sure-fire way to destruction.(Read More)
Merchant Factors has been a member of the Chamber of Commerce since 1985 but it strikes us that many of our fellow members are probably unaware of the valuable service we provide. We started trading with the specific objective of providing working capital solutions to businesses with a need for greater cash flow. We're a flexible alternative to the often bureaucratic, corporate banking sector.(Read More)
Merchant Factors is a financial institution with a specific focus on improving cash flow across a range of industry sectors in South Africa. Our working capital solutions have been utilized extensively over the past 25 years, not only by businesses experiencing rapid growth, but also by those requiring a much needed cash flow injection to get things back on track.(Read More)
In comparing a factoring facility to an overdraft there are similarities but also differences because; While both provide finance at a determined interest rate, factoring charges a factoring fee as well which covers the provision of the administrative service (sending out statements, allocating payments, checking that quality and deliveries are in accordance with the orders placed, etc.) but, more importantly, ... (Read More)