Debtor Finance

INTRODUCTION

As a supplier, how much cash is locked up inside your unpaid debtor invoices?

Debtor finance, also known as debt factoring or invoice finance, is an increasingly common finance solution for a business to improve their working capital by releasing the cash tied up in their unpaid invoices.

Consistent cash flow is the biggest challenge for any business, and the challenge is only aggravated when debtors are slow to pay invoices, which can hinder your business growth. Debtor finance solves mismatches in cash flow, giving business owners access to already earned cash.

A lender will pay you up to 80% of the amount owing on your invoices, and you can use this to pay suppliers while you wait for clients to settle their bills. When they’ve paid you, you can then pay your lender back.

Debtor finance also allows relatively quick access to cash compared to other types of financing and develops with your business because it’s secured to your accounts receivable ledger. So, your debtor finance facility will grow as your business expands its account customers.

An ideal short-term cash flow solution. Debtor finance bridges gaps in cash flow to keep things moving within your business and is often used to meet day-to-day demands by bringing your cash flow forward.