A Quick Snap Shot Into Debtor Finance

 In Debtor Finance, Invoice Factoring, Invoice Finance

I take a lot of calls from people inquiring about Debtor finance (also known as Invoice finance, Factoring and Cash flow finance just to name a few).

Some of the callers have an idea of what Debtor Finance is however most are not really sure how it works or what’s required from them to be eligible to obtain a facility. So I thought I would do a quick step by step debrief of how Debtor finance works and then a few points on what is required of you.

How does debtor finance work?

  1. You receive a Purchase Order from your customer
  2. Complete work & deliver product
  3. Obtain evidence you have delivered product/service
  4. Raise Invoice
  5. Send Invoice to Customer and copy to Financier
  6. Financier Pays up to 90% of the invoice
  7. Financier waits for payment

So what’s required of you?

  • A registered ABN – You can be trading as a sole trader or company
  • Solid, credit worthy customers – must be companies not individuals. E.g. mums & dads. This is Business to Business only.
  • Good paperwork for evidence of work being done or products delivered
  • An appointment with the financier to run through your business
  • Application form must be filled out detailing debtors, annual income etc
  • Paper work must accompany the application form. Things like your  Personal asset & Liabilities statements and company financials , identification and bank statements etc
  • Once proposal is issued and accepted – a credit check must be run on all your customers

If you require more information please call the office on 1300 651 243 to organise an appointment and discuss how we can help you capitalize on more opportunities for your business.


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