Debtor finance
What is debtor finance and how does it work?
Debtor finance, also known as invoice financing or accounts receivable financing, is a financial solution that allows businesses to convert unpaid invoices into immediate working capital. Instead of waiting 30, 60, or even 90 days for customers to pay, debtor finance gives you access to a percentage of the invoice value right after it’s issued. This type of financing is directly linked to your accounts receivable, meaning as your business grows and your invoices increase, your access to funding scales alongside it.
Here’s a typical process for debtor finance:
1. Issue Your Invoices:
When you sell products or services on credit, you issue an invoice with payment terms ranging from 14 to 60 days.
2. Access Funds:
Instead of waiting for the payment, you can access up to 85% of the invoice value through a debtor finance facility. These funds are usually available within 24 hours of issuing the invoice.
3. Customer Payment:
Your customer pays the invoice according to the original terms.
Settlement: Once the invoice is paid, the remaining balance, minus any fees, is released to you.
The Capital Plus Finance advantage for debtor finance
Debtor finance provides several advantages that can significantly improve your business’s financial health and operational efficiency. Key benefits include:
Accelerated Cash Flow: Immediate access to funds improves cash flow, enabling you to cover operating expenses, pay suppliers, and invest in growth opportunities.
Flexible Financing: As your sales and invoices increase, so does your access to funding, making debtor finance ideal for businesses experiencing rapid growth or seasonal revenue fluctuations.
Improved Working Capital Management: Faster access to cash reduces financial pressure, allowing you to take on more contracts and expand operations.
Early Payment Discounts: Access to funds sooner lets you capitalise on early payment discounts from suppliers, leading to significant savings.
Reduced Collection Risk: Some providers offer credit control services, helping manage the collection of outstanding invoices and reducing the risk of bad debt.
No Additional Debt: Debtor finance isn’t a loan, so it doesn’t add to your business’s debt. Instead, it unlocks the value of your receivables, helping you maintain a strong financial profile for the future.
Work with the debtor finance broker experts
When you have Capital Plus Finance at your side, getting started with debtor finance is simple. That’s because key team members, including our Managing Director, have intricate knowledge of the debtor finance industry.
That means we can recommend the best solution from our expansive panel of debtor finance lenders, so you have the confidence knowing you have the facility that is right for you.
Learn more about debtor finance with a phone call
Are you ready to unlock the potential of debtor finance for your business? Contact Capital Plus Finance today to discuss how it can help you plan for a stronger financial future. We’ve helped countless businesses just like yours accelerate cash flow and achieve business goals with confidence. All it takes is a phone call to get things moving.
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Location
Suite 407, 2-8 Brookhollow Avenue
Norwest NSW 2153
