Debtor finance is a financing solution that most businesses use to address their cash flow problems. Companies with small capital often experience cash flow difficulties. Their invoices are paid in the next 30 to 60 days. Businesses resort to debtor finance to put their enterprise in the best position to pay operating expenses, by using cash receivables as collateral,
How Debtor Finance Works?
In Sydney, application for debtor finance is an easy and straightforward process:
To determine if your business is qualified for debtor finance, the financing companies will evaluate the following:
- The organisation of your enterprise and financial statements
- Creditworthiness of your customers
- Invoices free of other financial obligations
- Your credit collection procedure
Once a finance agency finds you qualified for debtor finance in Sydney, your customers will receive a notification advising them of the new address where to mail their payments.
Finance companies will go over the invoices you have issued to customers and verify that they are accurate, free of disputes and receivable in less than 60 days.
Funding Your Account
Once you have fully complied with all requisites, you can receive cash advances equivalent to 80% of all invoices. After deducting necessary fees, the remaining amount will be given once your clients pay the invoice in full.
What are the benefits of Debtor Finance in Sydney?
Many growing businesses encounter difficulties in cash flow management due to the lag time of invoices from clients. By taking advantage of debtor finance, they can enjoy the following benefits:
- No real estate collateral required since your cash receivables serve as the guarantee
- Flexible and easy to manage to finance perfect for growing businesses
- Simple and convenient application that can be complied with ease by interested enterprise
- Improves cash flow to address operational expenses by providing advances ahead of the scheduled invoice payments