Commercial Finance
If your business is profitable but cashflow-constrained because clients take 30, 60 or 90 days to pay, debtor finance lets you access the cash tied up in your invoices without waiting for payment.
The Problem It Solves
Many profitable businesses struggle with cashflow not because they lack revenue, but because of the gap between delivering work and receiving payment. A business invoicing on 60-day terms is effectively extending an interest-free loan to every client, every month.
When you are also managing wages, supplier payments, and the cost of taking on new work, that gap can create real pressure. Debtor finance converts your outstanding invoices into accessible cash, typically within 24 to 48 hours of raising the invoice, rather than waiting for the debtor to pay.
It is not a loan in the traditional sense. The facility grows with your business because it is linked to your debtor ledger. The more you invoice, the more you can access.
Facility Types
The lender advances a percentage of your invoice value and manages debtor collections on your behalf. Your clients are aware of the arrangement. Suits businesses that want to outsource debtor management.
You retain control of your debtor ledger and collections. The facility is typically confidential, meaning your clients pay you as normal and are unaware of the arrangement. Suits more established businesses with strong internal credit management.
Rather than financing your entire debtor ledger, you choose which invoices to finance. Useful for businesses that only need periodic cashflow support rather than an ongoing facility against all debtors.
Supports businesses importing or exporting goods. Covers the gap between placing an order with a supplier and receiving payment from your buyer. Structures include letters of credit, supplier payment facilities and import finance.
Who It Suits
One of the most common users of debtor finance. Trucks are running, fuel and wages are going out, but payment from clients is 30 to 60 days away. Debtor finance bridges that gap consistently.
Businesses placing staff with clients on weekly or fortnightly payroll cycles but invoicing on 30-day terms face a structural cashflow mismatch. Debtor finance is a natural fit for this model.
Businesses that produce goods and invoice distributors or retailers on long payment terms. The cost of materials and production comes well before payment arrives. Debtor finance covers that cycle.
Progress claims and subcontractor invoices are common in construction. Where payment from head contractors is slow, debtor finance against progress claims can keep the business liquid and the project moving.
How It Works
You deliver goods or services to your client and raise an invoice with your usual payment terms. The invoice is assigned to the debtor finance facility.
The lender advances a percentage of the invoice value, typically 70 to 90 percent, usually within 24 to 48 hours. You have access to the cash without waiting for the client to pay.
When your client pays the invoice, the lender releases the remaining balance to you, less their fees. The facility revolves, meaning as you raise new invoices, new funds become available.
Assessment Factors
The creditworthiness of your clients matters. Lenders are effectively lending against your clients' ability and intention to pay. Strong, established commercial debtors are viewed more favourably than a high volume of small or unknown clients.
Lenders prefer businesses with a consistent level of invoicing rather than highly irregular or seasonal debtors. The size and predictability of your ledger influences facility terms and advance rates.
While debtor finance is primarily secured against the invoice ledger, lenders still assess the overall financial health of your business. Trading history, profitability and existing debt levels are part of the assessment.
Common Questions
If outstanding invoices are holding your business back, talk to us. We will assess your debtor ledger and identify the right facility to get cash moving faster.
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