How can I secure a cashflow loan?
There is no ‘one-size-fits-all’ when it comes to securing a cashflow loan. We explore the different loan options that are worth considering and exploring further.
What is Debtor Finance?
Debtor finance, sometimes called ‘cashflow finance’, is a facility that uses a business’s accounts receivable ledger as collateral. This allows you to draw up to 80 percent of the balance of your outstanding invoices. When the invoices are settled, the balance is repaid, less any applicable fees.
With debtor finance, you use the money you are owed to free up working capital. There’s no need to worry about extra debt or ongoing bank commitments. If your business has customers on payment terms of 30 to 90 days, and they often pay late, debtor finance is a worthwhile option.
Could trade finance be more suited to your needs?
Trade finance provides you with fast funding for stock, inventory and raw materials so you don’t have to turn away new orders. This type of financing allows you to use a revolving line of credit to pay your overseas or local suppliers when you need it, in almost any currency. Trade finance can be facilitated with TT (telegraphic transfer), Letters of Credit or Documents against Payment.