Debtor Finance is a real life-saver!
Essentially, it's a finance product that funds directly from your debtor's ledger or invoices, and lets you draw down and use 80% of the money as soon as you invoice a customer, without having to wait for them to proceed with the payment. If you are without a dependable, consistent cash flow, your business becomes vulnerable, regardless of how successful or viable it is. Because, when invoices begin to stack up, and you're just not getting the money you're owed in time, things quickly turn sour, because you simply don't have the required resources to pay your suppliers and take on new businesses.
Debtor Finance allows you to easily avoid cash flow problems associated with prolonged invoice times, and gives you access to your money immediately upon finishing a job or a project. Many businesses rely on an overdraft to overcome these challenges. Debtor Finance functions in a similar fashion, except that, unlike an overdraft, it doesn't have any drawbacks, such as the need to supply personal assets as security, and only having access to that value. Instead, Debtor Finance instantly turns your unpaid client invoices into cash in your bank account, and lets you withdraw and immediately use up to 80% of that money - whenever you need it! It's an effective way of leveraging your own debtors to unlock consistent cash flow in your business, without having to take on any risk, put up any real estate security or take on any additional debt.
So, what happens to the other 20%? Does the lender get to keep 20% of your hard-earned money?
Of course not. The remaining sum of the invoice is added to your account when the debtor receives the payment from your client. They only charge a small fee for their services, and the rest is added to your account, and readily available for use.