Debtor Finance is Back on Track!

Statistics released from DIFA media release showed that Debtor Finance or Factoring is back on track and growing rapidly in Australia. These findings show that business owners are taking advantage of this type of facility to grow their business. In Australia with the change in Government, new businesses are at their highest figures in years. Great thing about Factoring, they do most Industries. New business owners are setting factoring facilities up early in the business career, so that they keep more capital at hand to deal with different situations that may occur.

Debtor Finance gives business owners the chance to fund invoice and use those invoices as a line of credit, drawing a percentage of the value upfront on completion. Once the invoice is paid, the lender would take off the borrowing and pass on the final amounts to the clients less fees. Factoring gives the owners flexibility going forward. As the business grows so does the facility. This allows owners to access to more cash as it cements itself in its industry.

Using Factoring also helps business with back end procedures. Smaller businesses may not be able to afford collection staff in the juvenile state. Debtor Financiers have staff that verify completion of work, establish payment dates, and liaise with owners when those dates are overdue. Owners then can focus on their business, not in there business.

Factoring also provides credit checks on new debtors. Although not a fail safe solution, Factoring companies can give a heads up to partnering debt collector that there are bad debts. Factoring firms also pre determines credit limits from those searches, helping owners make decisions with exposures. It is important to understand Factoring Companies are lenders. They offer these extra services to protect themselves and the client from a bad credit situation. Factoring is there to help you finance your business and nothing else. The rest is up to owner to maintain.

About the author: Antony Firth