How can we help you?
FAQs
Why Merchant Factors?
Proven track record since 1988. We have assisted over 3,300 businesses with working capital funding.
We are owned and managed by entrepreneurial businesspeople for businesspeople.
We provide a personalised service supported by extensive expertise.
What is Invoice Factoring?
Invoice factoring allows your business to unlock cash tied up in your debtors’ book. Merchant Factors can advance up to 80% of an invoice’s value upon presentation, with the remainder paid once the customer settles. It’s a fast and effective way to improve cash flow.
What type of businesses are a good fit for Invoice Factoring?
Businesses in growth phases or seeking cash flow stability. Factoring reduces early payment discounts, mitigates cash flow risks, and allows outsourcing of credit control and collections. Our team provides comprehensive debtor reporting for informed decision-making.
Is Merchant Factors registered with any financial bodies?
In terms of the current legislation, we are exempt from registering with any regulatory body.
Can I apply for funding for a startup or new business?
We focus on business with a 2-year track record.
What are the requirements to apply for funding?
Your business should have a minimum annual turnover of R6,000,000 and must have been actively trading for at least 2 years
How are you different from other lenders and banks?
Merchant Factors is future-focused, fast, and flexible. We structure funding around your cash flow needs, with transparent costing and customised solutions. We like to partner with you and act as a sounding board for your business ideas and opportunities.
Can I come to your office to complete a form?
Yes, you may visit our office, though we recommend contacting us first to arrange a date and time to meet.
Do you only fund businesses in Johannesburg and Cape Town?
We fund all registered businesses across South Africa.
How will my customers perceive me using Invoice Factoring?
Professional and responsible. Customers generally understand that financing supports business growth and ensures timely service.
Must I factor for all my customers?
No, you choose which customers to factor. Once selected, all invoices for that customer must be factored to maintain accuracy and consistency.
What are the costs associated with Invoice Factoring?
Administration fee: 0.5%–2.5%
Discount/interest: 2.0%–5% above prime, depending on service structure and customer creditworthiness
How long will it take to process my application?
It depends on you. Provided that we have all the necessary information, approval can be given within 24 hours.
How quickly can I access the funds?
Funds are typically available within a few business days once the application is approved, the security documents are signed, and security is in place.
What if I want to settle early?
We encourage our clients to stay with us to receive the full benefits of our system, our expertise and our process, which we believe is difficult to beat. However, if leaving early is unavoidable, the early settlement fee is disclosed upfront.
Does my business information remain confidential?
Yes, all information is confidential and used only to assess your application and funding requirements. We are fully POPIA compliant, and we value your information and keep it close to our chests.
Can I use my assets to secure funding?
Yes, all funding is secured
Can I apply if my business has a listing or judgment?
Adverse listings or judgments are assessed on a case-by-case basis. Contact us to discuss your specific situation.
What types of businesses would be a good fit for Bridging Finance?
Businesses that require fast funding decisions can benefit from Merchant Factors’ bridging loans.
How does Bridging Finance work at Merchant Factors?
Call us to discuss our bridging and working capital loans. We’ll guide you through the application process, and once approved, funds can be advanced immediately after signing the relevant documents digitally and registration of security.
How is the interest rate determined for my bridge loan?
Interest rates are based on factors such as the risk associated with the loan, the loan term, and current market rates. Merchant Factors ensures our rates are competitive and suitable for your business needs.
How do I sign the legal agreement?
Most agreements are signed digitally. If in-person signing is required, our team will arrange a convenient meeting.
What if my business is not registered for VAT?
VAT registration is not required, but we will need a statement of account from SARS.
What are the terms and conditions typically associated with PCF (Post Commencement Funding)?
PCF obtained during business rescue, approved by the practitioner, ranks ahead of historic unsecured creditors. Merchant Factors requires tangible assets or debtors as security, with other terms tailored to the circumstances. The PCF funding requirement must fall within the parameters of our offering, i.e. factoring and adjunct facilities and meet our PCF credit criteria.
What happens if the company can’t secure PCF?
If a company in financial distress can’t secure PCF, a wind down or liquidation may be required.
What documentation is typically required for obtaining PCF?
We need the business’s two most recent annual financial statements, management accounts, Debtors and Creditors ageing, and the last six months of bank statements for initial assessment. Additionally, the Business rescue application, founding affidavit, clear understanding of reason for distress and turnaround strategy will be required.
Why is PCF important during business rescue proceedings?
Companies entering business rescue are usually over-indebted and need additional funds to settle debts and fund operations. A successful business rescue is rarely possible without PCF.