Debtor Finance | Invest In Your Growth
What is Debtor Finance?
Debtor Finance, sometimes referred to as Invoice Finance, acts like a revolving line of credit. Every time your business raises an invoice, you could get paid 80-85% of that invoice the very next day, without having to wait for the client to pay you.
How does Debtor Finance work?
Within 24-48 hours of work being completed and an invoice being raised, you will receive 80-85% of the funds from the lender. When the customer pays the invoice, the funds will be disbursed to the lender, and you will receive the remaining 15-20%, less the interest and fees. Interest rates and fees vary based on the lender.
Understanding the difference between Debtor Finance and a Bank Overdraft:
A debtor finance facility grows in conjunction with your business. Unlike bank overdrafts which can be limited by the amount of equity in your property, debtor finance grows with your business and your business’ debtors.
Debtor finance does not require property as security, instead your business’ unpaid invoices serve as security. The amount borrowed on bank overdrafts does not need to be paid back over a set term however interest will be charged on the outstanding balance. Whereas with debtor finance your client repays the lender and your business pays a service fee and interest in the process.
Benefits of Debtor Finance:
- Accelerates business growth by giving your business access to capital instantly, and the finance limit grow with your business.
- Bridges the working capital gap from unpaid invoices, making day-to-day financial commitments more manageable.
- The business invoices are accepted as collateral, thus minimising the risk of involving property or personal assets.
What our clients say about Debtor Finance?
Pacific Finance clients that have secured debtor finance have found that their businesses have continued on a growth trajectory, while at the same time maintained a level of certainty around cash flow. It has allowed these businesses to jump into major projects that would have not been possible without this instant cash flow injection.
Lender requirements:
- Financial statements
- Receivables and payables report
- ATO statements
- List of existing business loans
- Personal asset and liabilities statement of the Director
Finance your future, by partnering with Pacific
Our team can tailor the finance solutions to your revenue cycles so that you can focus on your business’ growth. Let us help you give your business the most suitable working capital solutions.
Contact your Pacific Finance Broker today at info@pacificfinance.com.au or give us a call at 08 9321 2120.
DISCLAIMER: Terms and conditions apply.