Interview the Product Specialist: What is Purchase Order Finance & Debtor Finance? (video)
Learn what debtor and purchase order finance are from the below video.
Hi I am Julia, here with Daniel Dunsford Product Specialist for AR Cash Flow, I am just going to ask him a few questions:
If I get a facility with you, will my customers know?
In most situations your customers do know that you’re using invoice finance. But there are options available where you can do it on a confidential basis.
What will my customers think?
In this day and age most businesses large and small use some sort of banking finance or finance facilities to run their operations so if your customers know that you’re using an invoice finance facility or you need funding to run your business, they’re probably using it themselves and it will come as no surprise that you need one too. If you don’t want your customers to know that you’re using debtor finance there are confidential facilities available, the downside with a confidential facility is you need a higher level of paperwork and there may be other collateral requirements in order to qualify for it. And also we (or the financier) may look at you as a business a lot more in depth than if it was a full disclosed facility.
Can you finance invoices to customers overseas?
Absolutely! One of the key services we provide is a non recourse invoice finance facility which is primarily targeting Australian businesses who are supplying solid customers in other markets overseas.
What is Purchase order finance?
Purchase order finance is exactly that. When you’ve got a purchase order from a solid credit worthy customer but you don’t have the capital or funds to be able to deliver on that order. That’s when you would use Purchaser order finance, there’s no invoice yet to fund against cause the goods haven’t been delivered but you have that outstanding order.
What’s the difference Purchase order and Inventory finance?
We classify Purchase Order finance where the goods are going direct from your supplier overseas to your customer. Inventory finance is where you need to bring the stock into your warehouse and you need to pick and pack it and then send it out to your customer. In both situations you do need to have pre sold stock in order for us to fund it.