How Debtor Finance Professionals Can Help You
Debtor finance is the process of funding a business via its accounts receivable ledger. It is a solution to speed the financing of slow paying invoices that are usually paid within a credit term of 30 days. It thereby helps in increasing the cash flow of the business to meet its operating expenses. There are two types of Debtor Finance – Disclosed and Confidential. Invoice Factoring (Disclosed) is when the customer is informed that the invoice amount needs to be transferred directly to the financier. Invoice discounting (Confidential) is when the customer (debtor) is unaware of the funding facility. Irrespective the business (client) submits its accounts receivable ledger to the money-lending entity that verifies the submitted ledger and transfers large quantities of the unpaid invoice amount into the client’s account. Once the customer pays the complete invoice amount, the financier releases the remaining percentage of the invoice to the client, charging a small fee. Hiring a freelance Debtor Finance expert on Guru is easy.
Any business that is indulged in the trade of goods or services to other businesses can avail of debtor finance. Debtor finance requires a financial institution to purchase your outstanding debts, providing you the cash amount after charging a certain fee, and then collecting the debt amount from your debtor. The control of the collection functions can rest either with the business or with the debtor finance financiers. It helps businesses improve their cash flow, eliminates the provision of quick payment discounts, ensures greater certainty of funds collection and helps retain the business equity. Debtor finance also increases the company sales by conveniently offering extended credit terms to customers, helps boost stock levels for increasing demand and ultimately aids in the overall growth of the business. Freelance debtor Finance experts can be connected with on Guru. Find the pro you need today!