Home > AR Cash Flow see rise in demand for debtor finance

AR Cash Flow see rise in demand for debtor finance

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As regular business overdrafts and loans are tough to obtain from financiers and debtors are taking longer to pay invoices, debtor finance is enjoying a surge in applications as small business owners scramble to gain access to short term cash flow.

A September survey by the Institute of Factors and Discounters shows the turnover in debtor finance rose 19% year-on-year. In debtor finance, a financier or cash flow finance provider will advance up to 80%, less a small financing cost. Once the invoices are repaid by the debtor the remaining 20% is paid back to the client.

AR Cash Flow  is seeing a surge in the amount of wholesalers and manufacturing businesses needing debtor finance. Assistance in collection of invoices is also a top priority for most clients and credit management to ensure they are doing business with credit worthy customers, keeping a close watch on the amount of credit extended to each customer.

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