favi

Unlock the cash flow in accounts receivable

Get funded up to 90%

Borrow from $5k - $150M

Works as a business line of credit

No other security required

debtor-finance-first-image

What is Debtor Financing?

Debtor Financing is a facility that allows businesses to receive financing capital related to a portion of accounts receivable. It is another method to boost the working capital/cash flow of a business.

Under debtor finance, lenders provide a limit against the accounts receivables ledger of the business. Businesses can get financed up to 90% of their receivable ledger. They don’t require to provide any additional security.

Similar to a business line of credit, the interest is only charged on the amount drawn and not the entire limit. This allows businesses to stay on top of businesses’ expenses and make growth decisions.

What makes me eligible for Debtors Financing?

  • Business must have an active ABN or ACN
  • A business must have an accounts receivable ledger from other Australian business.
  • Debtor aging must not be more than 90 days.

Our loan guide

Debtor Finance

Loan amount

$5k- $150M

Interest rates from

9.99% p.a.

Loan term

Ongoing

Pre-approval time

24 – 72 hours

Unconditional approval & settlement time

7-10 days

Repayments

Gets settled against payment of debtors within 60-90 days

Security

Secured against current assets of the business No real estate security required

What you need to know

Can be used for

Buying stock/Inventory

Paying creditors

Other working capital needs

Documents required

Last 6-12 months bank statement.

Financial statements

Aged receivables ledger

ATO statements

A valid identification proof

Benefits

Get paid against debtors’ ledger in advance

Can go higher funding without real estate security

Does not impact business leverage

*The information provided in

critical information sheet

is intended as a guide only. Please contact us for more information.

What you should know about Debtors Financing

Have questions? Speak to our experts!

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What are the pros and cons of Debtors Financing?

Pros

Helps to cover the gap of slow payments.

Debtor finance limits are secured against the receivable ledger, so no additional security is required.

Generally, you can get higher limits without any additional security which is not possible with an unsecured business loan.

With a debtor finance limit, you only need to pay interest for what you have utilised (like a business line of credit/invoice finance).

You save interest if the debtor pays off early.

A debtor finance limit gives the flexibility to use the funds whenever needed.

Debtor finance is an off the balance sheet funding option, so it does not impact the health of the financial statements.

Cons

Generally, a debtor finance facility takes a longer time to get approved.

You may have to submit a receivables ledger on a regular basis with invoices as a proof.

A small line fee may be charged on the debtor finance limit for making the funds available to use for your business.

What documents are required to apply for a Debtor Finance limit?

Generally, a detailed assessment is done before approving Debtor finance limit and would require the following documents.

  • Last 6-12 months bank statement.
  • Financial statements
  • Receivables/Payables ledger
  • ATO statements
  • A valid identification proof

What are the differences between Debtor Finance and Invoice Finance?

Debtor Finance

  • Limits are determined basis the receivables ledger.
  • Need to submit receivables ledger periodically.
  • Do not need to submit proof of delivery.
  • Generally, debtors aging <90 days are only funded.

Invoice Finance

  • Limits are determined based on monthly invoice activity.
  • Need to submit an invoice every time to get financed against it
  • Need to submit proof of delivery along with the invoice
  • Generally, invoices with progressive payments are not considered by the lenders.

When can you use Debtors Financing for?

The best feature of Debtors Financing is that it enables you to unlock the cash in advance to keep up with your working capital needs. On top of this, there are many scenarios you could find having Debtor Finance useful such as:

  • To pay suppliers
  • To keep working with clients that insist on longer payment terms
  • Buying stock/Inventory
  • Paying tax dues
  • Advertising and Marketing
  • Meeting other working capital needs

How do I apply for Debtors Financing?

1. Upload your receivables ledger with invoices as a proof

2. Once the invoice is verified against the ledger and approved, the lender pays you up to 90% of the ledger

3. As your debtor pays the invoices, the balance of invoice will be paid to you net of charges.

4. Repeat the same process as you have new debtors on the ledger.

What are the differences between Debtor Finance and Invoice Finance?

Although Debtor Financing may look very similar to Invoice Financing on a fundamental level, there are differences you should know before choosing one. The major difference is the component that determines the limits of the funds.

Start loan application

Debtor Finance

Limits are determined basis the receivables ledger.

Need to submit receivables ledger periodically.

Do not need to submit proof of delivery.

Generally, debtors aging <90 days are only funded.

Invoice Finance

Limits are determined based on monthly invoice activity.

Need to submit an invoice every time to get financed against it

Need to submit proof of delivery along with the invoice

Generally, invoices with progressive payments are not considered by the lenders.

Real results with real people.

107+ customer reviews

5.0

Toni Speakman

Toni Speakman

I don’t usually post reviews on the internet, but I feel compelled to write one about our recent experience with Broc Finance. In particular, we’d just like to thank and recommend Neeraj, who has been extremely professional, quick to get back to us regarding information and has exceptional easy-going language so we could understand what was happening and what we needed to do. He endeavoured to get the help we needed in a very short amount of time and the funds were in our account within 2 weeks of applying. Neeraj managed to secure our loan at a much lower interest than the big banks and we would recommend Broc Finance - especially Neeraj, to anyone who is seeking financial assistance away from the big greedy banks. This is the 2nd time we’ve used this service, and it won’t be the last. Thank you.
Chi Morris

Chi Morris

Dear Sas, I want to express my heartfelt gratitude for your efficiency and the exceptional support that you have provided in helping me meet my business needs. It was always easy to deal with you and you were always available to answers every question. I was also quite impressed by your professionalism and efficiency which were quite exceptional. Thanks for going above and beyond to deliver an outstanding service. I look forward to working with you again in the future.
Ibrahim Alpay

Ibrahim Alpay

I highly recommend Saroj to anyone needing business funding. He’s helped me multiple times with fast and efficient service, securing higher than-expected loan amounts each time. Excellent experience!
Min Wilson

Min Wilson

The team delivered a well structured and highly supportive service that made the financial process feel streamlined and well governed. Each step was clearly defined, proactively explained. The overall outcome felt both efficient and value-aligned.
shephali jain

shephali jain

very professional and knew what we wanted and gave us the best services. we happy with Saroj service and he knew what he was providing and alway on the phone when we need him . thanks for a smooth professional deal.
Mugdha Chandekar

Mugdha Chandekar

A Trusted Partner in Commercial Finance I had the pleasure to discuss with Broc Finance on a complex commercial mortgage transaction, and I can confidently say they are the experts and professinals in this space. If you're looking for a commercial mortgage broker who brings clarity, integrity, and genuine commitment to the table, Broc Finance is the one to call. Highly recommended for any business owner seeking tailored financial solutions.
AJ Ambikairajah

AJ Ambikairajah

Broc Finance are an amazing company to work with. Saroj is the best broker I have worked with and very attentive, knowledgeable and efficient. Highly recommend
Deepesh Parikh

Deepesh Parikh

Saroj knows his business. To the point guidance, everything from start to finish was as expected and confirmed by him. Always recommend him for sorting it your personal or business finances. Thanks a lot for all your help Saroj.

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Frequently asked questions

Applying for Debtors Financing is similar to applying for other business loans. You need to enter some basic details regarding your business and submit documents as required. However, you need to carefully pick the lender who can meet your business financing requirements, are ready to use your account receivables ledger as a security and can offer competitive pricing. We at Broc Finance can help you with that, you can simply apply through our website or send us a message to contact you or simply give us a call on 1300 253 041 to talk to one of our lending specialists.

A Debtor Finance works similarly to a business line of credit. Here, the lender approves a debtor finance limit for your business based on your monthly activities within your accounts receivables. To withdraw funds, you need to provide/upload an accounts receivables ledger on the lender’s portal. You would be able to withdraw up to 90% of the amount of the receivables. Once the debtor pays their owing payment, your outstanding debt will be settled against the money received, and the balance would be transferred back to you after deducting the interest cost/charges for that period.

Debtor Financing is not a feasible product for every business. It depends on how you collect payments from your customer. For instance, if you have a retail coffee shop, you may not be eligible, as you would hardly raise an invoice on your customers as all your revenue would be driven through cash or POS. To be eligible for debtor finance, your business should have regular account receivables activities. Debtor finance is ideal for businesses where the credit period is generally higher.

A Debtor finance limit may have one or a combination of the following costs:

Interest cost: Interest charged on the funds drawn against the receivables for the period it remains outstanding.

Line fees: There could be a small monthly/annual fee charged by the lenders for facilitating you debtor finance limit throughout the term of the loan irrespective of your utilisation.

Receivable ledger Processing Fees: Instead of a line fee, some lenders may charge a one-off ledgers processing fee on each debtor’s finance throughout the term of the limit. Some lenders may give you an interest-free period of 60-90 days for a slightly higher processing fee.

Please feel free to reach out to us on 1300 253 041 or send us a message in case you wish to know more.

The debtor funding limit is determined based on the monthly receivables’ activity of your business. Generally, lenders are open to provide a limit of up to 3 – 4 months of the receivables raised by your business.

Generally, you are not required to provide any additional property security. The funding is advanced against the receivables raised and the lenders would have to charge over the account receivables.

Generally, a debtor finance limit is a less risky and more flexible product as compared to a normal unsecured business loan product and lenders can approve a higher limit which is not possible with an unsecured business loan or a normal business line of credit limit.

Generally, lenders can advance you up to 90% of the account receivables value depending on the risks associated with your business.

A Debtor Finance limit may not always be the right option for your business as you may have a business wherein you do not have account receivables activities, or your business requires a smaller loan amount, and a simpler option would be more suitable. There are various alternative business loan options that we can help you with. Some of the popular options are secured business loans, unsecured business loans, business line of credit and vehicle and equipment finance facilities. Please reach out to us on 1300 253 041 or send us a message. One of our lending specialists would get in touch in no time to assist you.

At Broc Finance, we endeavour to get the most adequate facility suitable to the business requirements of our clients. In most of the cases logged in through us, we try to get an indicative offer from the lender for our client’s consideration before proceeding with formal application and consent to credit check. This approach helps our clients to avoid unwanted rejections and credit checks which can significantly impact their credit scores.

We would be happy to answer if you have any other questions. Please contact us.

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