Recently Sensis released their Small and Medium Business Outlook & Confidence Survey for August. Over 1,000 small to medium sized businesses across Australia were surveyed. Whilst the survey covered a number of topics one aspect was that over 20% of the businesses surveyed said that the time it is taking to get paid by their customers is increasing compared to a year ago. 

If your one of the businesses impacted in this way then debtor finance may be a solution.

What are some of the signs for a Debtor Finance Requirement?

  • “I have all my money tied up in debtors”
  • “I wish my customers paid on time”
  • “If only I had more money, I could grow my business and take on some more work”

Why Debtor Finance?

  • As your business grows, the finance facility grows with it
  • Unlike overdrafts, you do not require real estate security
  • Is a self-liquidating facility, meaning that your business is not taking on any additional debt
  • A stand-alone facility that can be separated from your other Bank borrowings and Bank security
  • Fast access to your debtor’s outstanding invoices – no more waiting 30, 60 or 90 days to be paid.

How it works?

Debtor finance can be disclosed or undisclosed to your customers. You have the option to have a full ledger facility (where all invoices are subject to the debtor finance arrangement) or other arrangements where you only require a single invoice or a selective invoicing facility. So you can send through as many or a few invoices as you need.

Whose Debtors can be financed?

Any business may have a use for debtor finance. It can be particularly useful is you are in a growth phase or you debtors keep extending their payment terms to you. Because the invoices are used as the security by the financier the credit approval process is streamlined. This is because the financier looks at the strength of the debtor rather than you.

What percentage of the Debtors Invoice can be financed?

In some cases up to 90% of the approved value of invoices (subject to credit approval*) can be financed, less fees, within 24 hours of processing.

What security is generally required?

The financier uses the invoice as security. The financier will take a fixed charge over the Debtors of your business. In the majority of cases you do not need to provide any other form of security therefore keeping this security free for other uses (such as property).

Please do not hesitate to make contact so we can provide further details

This article is of a general nature and should not to be construed as an offer of finance. All applications are subject to Credit Approval.