Debtor funding is a funding facility that uses a business’s accounts receivable ledger as security over the loan.
The lender purchases unpaid invoices from the business owner and pays a portion (usually up to 80%) of the balance due on each invoice in advance. When the invoices are settled the remainder of the balance is forwarded, less fees.
This allows your business to use money that is owed to free up working capital for other much needed operational expenses without the need for any other security such as property or business assets.
Key Benefits of Debtor Funding
Use money owed as security
Keep working capital free
Smooths out irregular cashflow