Debtor Finance can be a feasible option for a business selling products or services to other businesses on standard trade/credit terms.
Debtor Finance offfers your business with cash, by enabling you to raise finance from the unpaid invoices owed to you. This direct flow of cash against the value of your outstanding invoices can benefit your immediate business prospects and allow it to grow.
As you raise an invoice, up to 80 per cent of the value of that invoice can be released to you within 24 hours. The remaining percentage is paid to you, less a service fee, once payment is received from your customers.
Your business will have continuous access to an ongoing supply of cash that is linked to your sales. This enables your business to grow and as it does, so does the amount of funding available to you.
These finances are available to sole traders, partnerships, family trusts, propriety limited and publicly listed companies and is used in a variety of situations, though mainly for working capital. Other scenarios include support for business turnarounds and as a line of funding in management buy-outs and business acquisitions.
There are many benefits, not least that the finance available grows in line with your business, and in most instances there is no requirement for real estate security. This compares very favourably with traditional overdraft style bank funding which tends to set a monetary limit linked to the security value in your property.
How it works:
1: You deliver goods or provide services to your customer
2: You invoice your customer and send a copy to us
3: We will advance you the pre-agreed percentage value of the invoice, usually the next day
4: We then collect the outstanding debt
5: We take out our fees and pay you the balance of the invoice value.