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Ask The Experts > Debtor Finance

Debtor Finance enables businesses which sell goods/services to other businesses on credit terms to borrow against the value of the outstanding invoices.

Instead of waiting 30, 60 or 90 days for payment by a customer, a debtor finance facility allows a business to access up to 100% (usually 80%) of the value of debtor invoices (accounts receivable) usually on the same day that the invoice has been issued.

  • Ensures cash flow is maintained.
  • Allows you to reuse dollar to generate profit.
  • As your business grows, so does your funding.

Other reasons to consider debtor finance:

  • Invaluable for start-up businesses.
  • You have orders but can't fill them until your current debtors pay.
  • Your overdraft no longer handles the volume of work or growth you are experiencing.
  • You can't afford to carry stock.
  • You want to avoid introducing new equity partners which means losing control or sharing the profits.
  • You want to fund the business based on business assets, not personal property.
  • You require funding for a merger or acquisition opportunity.
  • You want to restore cash flow after a period of trading losses, business relocation or heavy expenditure.
  • You want to restructure and clear taxation arrears, to pay creditors or negotiate new terms with creditors.
  • Saves management time.
  • Experienced credit staff will be liaising with your debtors/customers.
  • Credit checks to verify credit worthiness of those you are giving credit to.
  • Offering debtor's payment discounts can be expensive and inefficient.

Debtor finance is available to companies with turnover from $100,000 upwards. The type of facility and costs will depend on the health and size of the company as well the volume of business.

There are many variations on how this is operated by different funders, including price and security.

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