1. What is Debtor Finance?
Most businesses have tens if not hundreds of thousands of dollars tied up in unpaid invoices at any one time. Debtor Finance unlocks that money by receiving the cash from those invoices as soon as they are issued. So much money is tied up in invoices nowadays, that a trading business can often meet major finance requirements in this cost effective way.
2. What size does the invoice need to be?
If you only have one customer (debtor) then invoices we fund need to be at least $50,000 or greater with no upper limit.
If you have three or more customers (debtors) then individual invoices can be as low as $2,500 each so that when “batched” together, the total value of invoices to funded at any point in time make up at least $50,000 of requested funding each time.
3. Will my customers think my business is in trouble?
Many business owners recognise that working capital is crucial for every business and that debtor finance simply allows businesses to grab opportunities which might not otherwise be available when working capital is tight.
Debtor finance has become so well established that it would not be uncommon if your customers already deal with other clients using TIM Finance or other Debtor Finance providers. They may even use it themselves.
4. Who uses Debtor Finance in Australia?
The main areas of industry that utilise debtor finance are:
- Wholesale Trade
- Labour Hire
- Mining Services
- Professional Business Services
Debtor financing can also prove beneficial for:
Business start-ups – providing flexible finance to get new ventures off the ground.
Growing businesses – making your cash work harder for you.
Struggling businesses – bridging the gap between invoicing and receiving payment.
5. Does it matter if I only have one main customer?
Many growing Australian businesses have just one or two customers, which is not a problem when funding with TIM Finance as we do not enforce debtor exposure limits on our clients. . We’ll provide funds to you as long as your customers have a good record of payment and are financially sound.
6. Should my business use Debtor Finance or Factoring?
There are clear differences between factoring and debtor/invoice financing.
Factoring is for companies that don’t have an in-house credit control function. It involves outsourcing all of your credit control (ie: Collections) processes to the factoring provider, allowing them to chase all outstanding payments.
Some business owners may be reluctant to go down this route, as it means relinquishing control on a key part of your company’s day-to-day operations and they may not need or want to fund every invoice to every debtor.
Debtor/Invoice Finance is a better option for many Australian SMEs because it allows you to manage your business is you wish. You are responsible for collections (and hence your relationships with your clients) and Debtors/Invoice Finance is cheaper than Factoring, as there are usually less service fees, no minimums and no long lock-in contracts.
Free Expert Advice
If debtor finance is a solution you’re considering for your business, use the Invoice Market’s independent expertise and find out more about how it could benefit you and your business.
Help us to help you determine the best way forward. We specialise in supporting small and medium businesses.
Here’s why the experts choose TIM
This is Loren. She doesn’t work for us, but we’ve done a lot of business together. Loren is one of the many trusted business consultants who consistently recommend TIM to their clients. Watch the video below to find out why.
We’ve funded over a billion dollars to Australian businesses
Discover why so many Australian businesses are choosing TIM.
Our Customers Have Rated Us “Great”
Make cash flow management easy by aligning your
accounting software to TIM.ex.
TIM’s accounting interface is quick to activate and helps to manage
money and pay suppliers.
Get Tomorrow’s Cash flow Today
Helping you find smarter ways to use your own cash and avoid the pitfalls of borrowing funds. TIM Finance is always ready to help in a fairer, more flexible and far more affordable manner than a traditional business loan. Contact a TIM expert today.
TIM Finance offers several different funding solutions (Services), one or more of which has a no-fee, no interest and no long lock in contract period, called the Fully Flexible funding option. Conditions, fees and charges apply to some of the Services provided, which may change or we may introduce new ones in the future. Full details for all funding options (Services) including any fees and charges which may apply, is available on request. Lending criteria apply to approval of credit products. This information does not take your personal objectives, circumstances or needs into account. Consider it’s appropriateness to these factors before acting on it. Read the funding agreements provided, for your selected product/service, including all the Terms and Conditions contained in agreements provided, before proceeding. *T&Cs: Minimum 12 month invoice funding contract with TIM Finance. Direct clients only, offer doesn’t apply to broker introduced clients. All standard credit terms and conditions apply including credit assessment. Not applicable to existing clients.