Debtor finance or cash flow finance is a facility that enables a business owner or company to obtain up to 80% of their outstanding debtor amounts almost immediately, without having to wait for those debtors to pay as they normally would.
A debtor finance facility provides a great range of benefits to a company and can assist in growth, stock purchases, operating expenses or other commercial opportunities.
At Materials Handling Finance Pty Ltd (MHF), we provide fast and easy debtor finance. Here are the benefits you can get with debtor finance at MHF:
1. A growing business
Cash flow is often a stumbling block for a growing business. Increases in demand for stock can result in larger order quantities, which in turn comes at a higher up front cost. The need to accommodate more staff or warehouse space may arrive before the proceeds of sale are received, placing stress upon your existing cash flow. The possibility of taking on more contracts may depend on a businesses ability to immediately fund additional equipment needs. Each of these scenarios can cause significant growing pains to an expanding business.
One of the real benefits of debtor finance is in providing the equity to fund growth, without the need of real estate to secure the finance.
The concept behind cash flow finance is quite simple. Receive 80% of the invoice amounts owed by your existing debtors almost immediately and only pay interest until the amounts are received from the debtor. Using a debtor finance facility can give you greater flexibility to grow, make confident commercial decisions and take your company to the next level.
Upon setup of the debtor finance facility, your debtors are profiled to ensure they continue to meet their obligations. To minimise the risk of a bad debtor when a business has already received the amount via debtor finance, a flexible insurance facility is available to give you additional peace of mind. Insurance policies can cover up to 90% of the debtor amount.
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