Are you seeing to improve your cash flow? Your debtor finance facility should be able to assist you as this allows a business to finance their receivables with the aim of improving working capital and attaining a more constant cash flow. Debtor financing companies need to be flexible and straight forward when it comes to being used with no long-term contracts, no minimum, no ongoing monthly administration fees, and no property security.
Late payments can cause strain on a business cash flow and thus your debtor finance facility should help you get up to 80% on the face value on your invoices. The time frame for the same should be nothing more than 24vhours.
This increase in cash flow proves beneficial to businesses and helps fulfil orders. This allows the business to get control of their operating expenses, take advantage of early payment discounts, pay wages and suppliers on time, and make the necessary investment for expansion.
How this works is that you as a customer goes ahead and purchases goods or services. You will receive an invoice that validates your purchase which when handed over to your debtor financer, releases funds to you within 24 hours to the supplier. The customer then pays back the financer against certain trading terms.
Invoice Finance, Invoice Discounting, Receivables Finance and Cash Flow Finance are industry names that are given by lenders who seek to describe a facility which is generally provided on an ongoing basis where the businesses debtors are unaware that the facility is in place. The industry terminology for this is a confidential or non-disclosed facility. The option of factoring can also be offered on an ongoing basis however, there are certain lenders who will provide funding against single invoices. The businesses debtor(s) are aware of the nature of involvement; the industry terminology for this is a notified or disclosed facility.
While still dealing with the topic of Debtor Finance it is important to touch upon the subject of Trade Credit Insurance. This entails a variety of insurance tailored specifically to cover a businesss unpaid invoices. The problem to deal with here is that this form of insurance is quite often overlooked by businesses when considering their insurance requirements. This is particularly noticeable when a businesss unpaid invoices can be a especially volatile and one bad debt can undermine a businesss cash reserves.