Debtor Finance - Invoice
Discounting & Factoring

Simply fill in the enquiry form on the right for a free assessment. We can help you even if you are struggling to pay your credit card debt, personal loans and car repayments.

 

Cash flow finance for better working capital management and business growth

 

Are you aware that your business can obtain funding by using its accounts receivable ledger? The Australian Lending Centre offers debtor finance / invoice discounting and factoring as an innovative addition to traditional methods of obtaining finance to aid business cash flow (such as overdraft facilities). You won’t have to secure the loan with real estate property either, as you can borrow up to 90% of your invoice value or debtors ledger using your accounts receivable as security.

 

What is Debtor Finance / Invoice Discounting?

Debtor finance, also known as invoice discounting allows a business to use its business-to-business credit sales for better working capital management and to stimulate its cash flow. Essentially, debtor finance allows your business to borrow against its trade debtors for a quick injection of cash into your business that can be used for important activities, without waiting for your debtor payments to come in.

 

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How Does Debtor Finance / Invoice Discounting Work?

The Australian Lending Centre’s debtor finance provides:

 

• Up to 90% of invoice value
• No ‘bricks and mortar’ security required
• Similar interest rates to those enjoyed by overdraft facilities
• Increasing levels of funding as you grow
• Confidential – there’s no need for your customers to be aware of the facility – all invoicing and credit management remains with your business or accounts team
• Support – an automated service platform allows invoice tracking to alert you of trouble accounts sooner

 

Benefits of Debtor Finance / Invoice Tracking with Australian Lending Centre

The increased flexibility and greater cash position enjoyed by businesses using the Australian Lending Centre’s debtor finance enables greater control over their working capital. You will be able to:

 

• Increase your profits by taking on more business – increase production and sales
• Pay your suppliers sooner to take advantage of discounts for prompt payment – improve relationships with suppliers
• Finance additional stock and resources
• Refinance existing business finance for better interest rates
• Offer extended terms of credit to your customers when cash reserves are low
• Finance marketing and promotional activities to generate more sales
• Pay for an outstanding tax bill
• Have fast approval – once you are set up with the Australian Lending Centre, you can have the finance within 24 hours of invoicing.

 

 

What is Factoring?

Factoring is a type of debtor finance with one fundamental difference – factoring is not confidential and information may be disclosed. In other words, the lender may, when necessary, be in contact with the business’ clients to request settlement of outstanding invoices.

 

Factoring is different to invoice discounting as with factoring, there is a sale of receivables, whereas invoice discounting is borrowing where the receivable is used as collateral or security. Although the idea of factoring is similar in many ways, its administration is slightly different.

 

Several factors will influence whether to use debtor finance in the form of invoice discounting as opposed to invoice factoring:

 

• The strength of your business;
• The way you do business – i.e. your terms of trade;
• The type of industry you compete in; and
• Your customer base.

 

How Else Can Debtor Finance be Used?

• Financial restructuring and succession planning – you can release third party assets, such as a director’s real estate property from security for business assets
• Equity investment or preparation for IPO to list on the stock market
• Management buyouts – if two partners decide to split, one partner can buy out the other half of the business

 

Who Qualifies to Use Debtor Finance / Invoice Discounting & Factoring

Your business should fit the following criteria to qualify:

 

• Have annual turnover of at least $1 million
• Business-to-business invoices where the products and services have been delivered
• Have $150K of invoices to discount or factor

 

Example of Debtor Finance / Invoice Discounting or Factoring

You’re the financial controller for a large manufacturing company based in Sydney. As your market share increases your factory starts producing at its capacity… but demand for your product is increasing substantially. In order to meet the future demand for your product and to grow, you need to build another factory to increase your economies of scale and reduce your average cost per unit, to ultimately lower your long run average cost and become highly competitive and profitable. Your products are delivered to large, national retailers and your accounts receivable is between $1 million and $5 million – but you need to act fast and get this project underway. By approaching the Australian Lending Centre, we provide you with the finance quickly based on your outstanding invoices and debtors, and the factory starts getting built and set up months earlier than you could have achieved. It’s the dynamic business that can react to new market conditions in a hurry that will succeed.

 

Get the competitive edge - contact the Australian Lending Centre today to find out more about debtor finance, invoice discounting and factoring facilities available for your business to capitalise on. Call 1300 138 188 today or fill in the enquiry form on the right.

 

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