Debtor Finance

Debtor finance provides businesses access to working capital, which can help mitigate cash flow issues and keep things moving. With your business’s specific needs in mind, we can develop a cost-effective funding solution that also aligns with your goals.

WHAT IS DEBTOR FINANCE?

Debtor finance is a flexible financing solution your business can take advantage of to address cash flow problems while stimulating growth. If invoice terms are usually 30 to 60 days the current business capital may not be enough to cover outgoings or support orders. Debtor finance provides working capital based on outstanding receivables.

What is the Application
Process for Debtor Finance?

1. Initial Qualification

To determine if your business is qualified for debtor finance, the financing companies will evaluate the following:

To determine whether your business qualifies for debtor finance, financiers will need to conduct a financial health check. This includes:

  • Reviewing the organisation of your enterprise and financial statements;
  • Evaluating your customers’ creditworthiness;
  • Ensuring your invoices are free of other financial obligations; and
  • Assessing your credit collection procedure.

2. Client Notification

Once a financier determines that your business qualifies for debtor finance, your clients will receive a notification advising them of a new address to send their payments to.

3. Invoice Notification

The financier will review the invoices your business has issued to customers and verify that they are accurate, free of disputes and receivable in less than 60 days.

4. Funding Your Account

Once your financier is satisfied that your business has complied with all applicable requirements, your business will receive funding that is equivalent to 80% of the value of receivables. Your business will collect the remaining invoice amount, less any necessary fees, when your client has paid the invoice in full.

What Are the Benefits of
Debtor Finance?

Debtor finance is a great solution to fund growing businesses, especially if a business is turning away orders because of the lack of cash flow. Some of the benefits businesses enjoy with this funding solution include:

  • The redundancy of requiring real estate collateral because your business’s cash receivables serve as the guarantee on the loan.
  • The ease and flexibility of managing this type of loan give business owners more time to invest back into their business.
  • A simple and convenient application process.
  • An improvement in cash flow to address operational expenses and meet supply demand.

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