Business finance
Debtor finance
Debtor finance, also known as invoice finance or factoring, allows you to use your accounts receivables as collateral for borrowing giving you immediate cash for the value of up to 80-90% of the value of your invoices.
Loan size
$5K To $200K
loan term
30 to 90 days
Interest rate
Up to 30%
Approval speed
Fast
Debtor Finance
Key features of debtor finance
One of the key problems small business owners face is the delay between a sale and the payment of the invoice tying up working capital. This is exacerbated if your customers are slow to pay.
Getting immediate access to your cash allows you to reinvest in your business and grow faster.
Compare debtor finance
Advantages and disadvantages
Advantages
What are the advantages of debtor finance
- Speedy processing
- Straightforward approval process
- Mitigates costs and risks of late payment
Disadvantages
What are the disadvantages of debtor finance
- Costly
- Primarily available to more established businesses
Common uses & good to know
Everything else about debtor finance
Common uses
Borrowing against your invoices allows your business access to the cash from your sales in as little as 24 hours.
Debtor finance mitigates the risks and costs of late or non-payment of invoices which can be a substantial burden for small businesses.
The approval process is often very straightforward as many lenders can now link up directly to your accounting and invoicing software and provide immediate approvals.
Good to know
Debtor finance can be costly as you do not receive the full value of your invoice and you simultaneously pay interest on the amount borrowed.
Repeat late or non-payments by your customers could impact your fees, credit score and ability to secure invoice finance going forward.
Alternative Commercial Lending options
Other Business Finance Products
Secured Business Loan
A secured business loan is a loan made by a bank or finance company where the lender requires the borrower to pledge assets as collateral against the loan.
Business line of credit
A business line of credit is a very flexible form of lending where you have cash available to draw down on as and when you need it.
Trade finance
Trade finance is any form of finance that is issued to support international trade, including letters of credit, debtor finance, & export credit.
Using Debtor Finance to Manage Business Cash Flows
Any business owner knows the importance of managing cash flows to ensure that liquidity remains strong and that the business has the ability to take advantage of sudden growth opportunities or big contracts. Late payments impact businesses severely as cash that could otherwise be reinvested in growing stock, marketing or
Debtor finance FAQ
Frequently asked questions
If you have outstanding invoices, you may qualify for invoice finance. Lenders will focus on the characteristics of your invoices ahead of your business’ finance and operating metrics.
Debtor finance is more readily available to companies with an established trading history and long term customer relationships. You will receive better pricing for your invoices if you can show that specific customer has a history of full, on-time payment.
