Debtor Finance – What is it? And Can it Help Me?

By May 15, 2018Blog
Debtor Finance - What is it?

How Your Business can Benefit from Debtor Finance

 

WHAT IS IT?

Debtor Finance is, quite simply, a line of credit linked to and secured by your outstanding accounts receivable.

If your business supplies products or services to other businesses on standard trade credit terms, Debtor Finance can help.

There are a number of variations in how the service is delivered, ranging from Confidential Invoice Discounting (for larger, more sophisticated businesses with a dedicated finance department) to the option of full management of accounts receivables (which allows many of our smaller clients to focus on growing their businesses rather than chasing outstanding invoices).

HOW IT WORKS

  1. Upload Invoice – You invoice the client directly, and upload the invoice to us at the same time.
  2. 24 Hour Approval – We will pay you up to 80% of the value of approved invoices, less our fees.
  3. Cash Advancement – The remaining 20% becomes available to you when the invoice is paid in full.

WHAT ARE THE BENEFITS?

It is a powerful standalone business finance facility, which helps because:

  • As your business grows the facility grows with it.
  • Unlike a traditional bank overdraft, there is generally no need for real estate security.
  • It is a standalone facility that can sit alongside other business borrowings (such as overdrafts, term loans, and asset finance).
  • It helps you grow your business and increase purchasing power through improved cash flow.
  • There are no capital repayment requirements.

WHO IS IT FOR?

If you answer “Yes” to these 3 questions, your business could benefit from a debtor finance facility.

  • Businesses selling products or services to other businesses on standard trade credit terms
  • Invoices being issued are for delivered goods or completed services (i.e. not issued on a progress claim/milestone basis)
  • Businesses with an annual turnover greater than $200,000

If you would like any further information or think this might help you, please contact us at Advivo on 07 3226 1800 or Scottish Pacific on 1300 332 867.

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