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    Debtor Finance

    What is Debtor Finance?

    Are you waiting 30 days or longer for debtors to pay your invoices? Then you’ve got a cash flow gap, which can be a real issue if your business is running on empty until you get paid. Debtor Finance, (also known as Invoice Finance), helps small to medium businesses unlock funds tied up in outstanding invoices. It can improve your cash flow position dramatically. When you issue an invoice to a customer, Debtor Finance lenders will issue you up to 85% of the value of the invoices. Your lender will forward the remaining amount to you when your customer pays, less the lender’s fees.

    Use Debtor Finance to cover expenses like wages and bills, manage unexpected seasonal demand, or pay suppliers, tax requirements, or business dividends.

    How does Debtor Finance work?

    At Cabbage Capital, we source an appropriate finance provider and upload details of your unpaid customer invoices as collateral for immediate funding. Once the provider has verified the invoices, they will lend you a percentage of what is owed upfront (up to 85%). When the customer pays the invoice, you receive the remaining invoice balance less fees.

    We’ll help you set up your accounting software (such as Xero or MYOB) with the provider’s online process to allow your bookkeeper to automate uploads and reconcile transactions with the click of a button. You access funds as needed, and the amount you owe under your facility reduces as debtors pay into your account. 

    Debtor Finance can work on an ongoing basis, with more funds becoming available as you submit new invoices.

    How to apply for Debtor Finance

    1. Source finance

    Talk to us to find the best finance option for your business needs.

    2. Begin your application

    We can begin the application process over the phone or in person at your premises.

    3. Submit documents

    We’ll help you get your crucial information in order and finalise the required documentation.

    4. Receive finance

    When everything is approved, we’ll help you set up your debtor finance facility, and you’re ready to go.

    Types of Debtor Finance

    Invoice Factoring 

    Invoice Factoring is a type of Debtor Finance where the lender purchases the unpaid invoice and takes responsibility for collecting outstanding funds in consultation with your business. 

    Invoice Discounting 

    Invoice Discounting is a secured loan provided by the lender against your unpaid or outstanding invoices. As invoices are paid, this credit amount is automatically repaid.

    What are the benefits of Debtor Finance?

    Debtor Finance allows you to turn your outstanding invoices into working capital to cover expenses like wages and bills, manage unexpected seasonal demand, or pay suppliers, tax requirements, or business dividends, some other benefits include: 

    Unlock funds tied up in your unpaid invoices

    Release cash from your outstanding customer invoices to grow your business, pay operating expenses or fund growth. 

    Invoices act as security for loans

    Your invoices become the primary security for repayment of your invoice financing facility. So, no collateral such as property is required as opposed to a bank loan or overdraft.

    Boost cash flow and working capital

    Rather than waiting for your customers to pay, you can access funds upfront to conduct day-to-day operations and bridge cash flow gaps.

    A revolving credit facility limit that can grow with your business

    A form of finance that gives your business ongoing flexibility to access funds when you need them. The more sales you make, the more credit you can access.

    Am I eligible for Debtor Finance?

    Lenders will require solid invoices and an accurate, up-to-date view of the accounts receivable ledger to prove the creditworthiness of your business. This will include a review of revenues, profits, cash flow, existing debt levels, and how long you’ve been established. 

    On top of this, they will generally look for:

    • A valid ACN
    • More than 12 months in business
    • Invoices with other strong Australian businesses
    • Invoices are issued only after goods or services have been delivered
    • Down to a minimum of three customers
    • Ability to integrate with your accounting software such as Xero or MYOB

    What documents are required for Debtor Finance?

    It’s important to get your documentation right for any business loan application. At Cabbage Capital we ensure all your key information is in order to secure the funding you require. In addition to usual business loan supporting documents, the documentation you will need to provide includes: 

    • Accounts receivable ledger from your management accounting software
    • Your trading accounts for the last 12 months 
    • Examples of your last 12 months invoices
    • Demonstration that your invoicing systems are secure and robust

    Why Choose Cabbage Capital as Your Finance Broker?

    Our founder and principal broker, Brin Hayden, brings over 20 years of experience in the commercial sector, focusing on solutions for small to medium enterprises to provide a real impact.

    “I take the time to understand your business and develop a solution that works in your best interests. Because we’re smaller and leaner, you won’t be paying for the overheads of an army of consultants, and we don’t apply a one size fits all approach. 

    Unlike banks or single product providers, we source finance from our network of 30+ lenders competing for your business. I bring in-depth knowledge of the lenders, options, and facilities open to you. We’ll shop around to identify and source the ideal package and arrangement for your requirements. And then negotiate the best rates and terms on your behalf.  

    Debtor Finance is a fast and easy way to unlock funds tied up in your unpaid invoices to boost your cash flow and working capital. We can take away the stress of chasing invoices and replace it with the reassurance of a revolving credit facility that can grow with your business.”

    Brin Hayden

    Founder and principal broker

    “We can take away the stress of chasing invoices and replace it with the reassurance of a revolving credit facility that can grow with your business.”

    Let’s get started

    If you’d like to book a meeting to discuss your needs or start a finance application, leave your details, and we’ll get back to you within 24 hours.
    Alternatively, call Brin at 0418 574 655. 

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