What is debtor finance?
Invoice or debtor finance is a lending facility secured against outstanding invoices that you have issued to customers. When you create a new invoice, the finance company will lend you up to 85% of the invoice value. When the customer pays, the remainder of the cash is forwarded to you, less the provider’s interest and fee.
Debtor finance can be a great boost to cash flow, helping to cover anything from a new contract and unexpected seasonal demand, to everyday expenses like staff wages and bills.
What do I need to get this type of finance?
- This finance is primarily for invoices issued in a business-to-business environment
- Must have a diverse and solid client base. Your clients’ creditworthiness will be assessed
- Solid business history with sales and cash flow
What are the benefits?
- Maximise working capital, boost cash flow
- Invoices act as their own security – no property or assets required
- Credit facility grows as your business grows
- Can finance anything from single invoices to every sale you make
- Can accept larger contracts with more confidence to meet supplier expenses
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