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HomeDebtor Finance – Invoice Factoring

Debtor Finance – Invoice Factoring

Debtor Finance is a process to fund a business using its accounts receivable ledger as collateral. Invoice Discounting and Invoice Factoring are two types of Debtor Finance, and whilst they achieve the same goal, they are different in terms of how a lender will control your sales ledger.

Invoice Factoring: Eligibility Criteria

Lending criteria may vary lender to lender, so we take the time to understand what your business needs. Generally, when assessing eligibility, a lender will require the following:

Annual turnover of $200,000

Business has been trading for at least 12 months

Operating at a profit and be creditworthy

FAQs

Frequently Asked Questions

Businesses choose to use debtor financing so that they can access the cash that is owed to them immediately, rather than waiting for their clients to pay them. Perfect Capital works closely with a large portfolio of traditional and alternative lenders, so we’re confident that whether you’re expanding, purchasing new equipment, or looking to stabilize your cash flow, we can find the right solution for you.
Debtor finance is used by a range of businesses who may have a long lead time between invoicing and payment. These often include manufacturers, construction businesses, service industries, wholesalers, and growing businesses.
Usually not. Most lenders will provide the facility against the assets of your business, rather than a property. But this ultimately depends on the lender and your individual circumstances.
Also known as accounts receivable finance, invoice factoring offers a boost to your cash flow. The factor collects payments from your customers and pays you the remainder of the receivable, retaining a percentage as a fee.

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