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Cashflow Finance
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Cashflow Finance

If you have a business with significant capital tied up in “receivables”, then cashflow finance can be a good facility to help fund business growth or to release some of that capital for other purposes such as acquisition of property.

There is a large field of Debtor Finance providers in the market place that range significantly on:

  • Pricing (Interest and Fees).

    Note that with cashflow finance facilities, the costs in fees will far outweigh the interest.

  • Credit Policy.

    This relates to how easy it is to get your required facility limit and the percentage value of your invoices that you can access.

  • Service.

    This can be a very important aspect if you rely heavily on the facility and you need the funds promptly after submitting your ledger.

  • Integrity.

    Put simply, some Debtor/Invoice Financers should be strongly avoided.

Security

Generally your Debtor Finance facility will not require any other security than the balance sheet of your business. Sometimes however, it might be necessary to provide additional security on a temporary basis, such as a mortgage. The terms for the release of a mortgage down the track when you’ve met certain parameters should be negotiated from the outset and documented.

Disclosed or Undisclosed

A Disclosed facility is where your customers are aware that the funder has an “interest” in the invoice. You should consider whether this is acceptable to you.

Entering into a Debtor Finance agreement can be a costly exercise if you don’t go into it with eyes wide open. So speak to us for some professional guidance.