Debtor Finance is a positive solution to turning negative cash flow into positive cash flow - although it is not the only solution available.

Let us take the example of the recruitment agency seen earlier:

• Recruitment companies have to pay their major expense, their temporary contractors, every 7 days.
• Their customers, however, pay them in around 35 days - with resultant negative cash flow
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Let's now introduce a debtor financier - factoring, invoice discounting or asset based lender and see how it changes the cash flow.

 

As can be seen above by sending invoices to a debtor financier (as soon as they are sent to a customer) up to 90% of the value of the invoices can be released to a company usually within 24 hours - turning negative cash flow of 28 days into positive cash flow.

For other examples of how debtor finance can help go to our learning centre and look at our introductory videos on debtor finance.