Debtor Finance – A Flexible Funding Option For SMEs

Working Capital For SMEs

Access to flexible finance solutions is crucial for SMEs. Yet many businesses have difficulty with securing funding, often borrowing from their family or putting their own property up as collateral to fund their business. This is where alternate funding options, like debtor finance, become an appealing choice for SMEs. 

Why debtor finance?

Debtor Finance allows businesses to get an advance of up to 85% of outstanding invoices without taking on any additional debt. Because the invoices themselves are used as collateral, the business does not need to provide bricks and mortar security to set up the debtor finance facility.

 

An added bonus of a confidential debtor solution is that it does not inhibit the business from also using other lines of credit, such as a bank overdrafts or unsecured loans.

 

In fact, a debtor finance facility can be an effective way of raising when:

  • the bank overdraft limit is insufficient, but raising the limit is too onerous or time consuming
  • a business owner doesn't want to use personal assets to raise additional required funds
  • arranging a management buyout and director loans need to be repaid
  • ATO arrears need to be repaid so that the business can apply for banking lines of credit
  • acquiring another business that has a fundable debtor’s ledger

 These are just a few scenarios where debtor finance can provide cash flow relief to businesses and support growth.

 

What makes Classic Funding Group unique?

Whilst there are a number of debtor funders in the market, Classic Funding Group has a number of unique features.

Besides being completely confidential, the facility is delivered through a low touch, online platform that integrates with most accounting software. The platform eliminates the need for time consuming reconciliations each month, which is a clear advantage over other solutions in the market.

Our clients enjoy unlimited, free uploads of ledgers into the online system to increase available funds at any time. Overnight drawdowns are also free and unlimited (where other funders charge extra), giving our clients full control over their funding.

Furthermore, we can combine debtor finance with equipment finance into an Integrated Finance facility, which opens up access to additional funds which might otherwise not be attainable.

We invite all businesses looking to improve their cash flow to get in touch with us to see how I can assist with a smart finance solution.

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