The debtor financing company you choose could be one of the most important business decisions you make as a business owner. 

The non-bank lending space has seen significant growth, particularly in debtor finance, and there are now more and more players entering the market. Additionally, seeking finance from avenues other than your bank is seen as more and more acceptable. Business owners now have access to dozens of different debtor financiers, and it is important to apply serious thought to which debtor financier you partner with. Debtor financiers get involved in your business and can therefore be a fantastic resource if the right financier is chosen.

So, how do you choose the right debtor financing partner for my business, and what considerations should I make?

  • Facility Structure:
    • Advance Rate – some financiers will advance as much as 100% while most of the industry will offer between 70% and 80%.
  • Recourse Period – some financiers offer 120 day recourse periods however the industry standard is 90 days.
  • Concentration limits – will my finance provider allow me to fund against the customers I’m invoicing?
  • Operational Efficiency –how quickly the financier can advance funds and act upon your requests? Also consider whether or not you are restricted in the number of ‘drawdowns’ you’re allowed per week and what costs are associated with unusual requests or extra drawdowns (this is often very expensive, so be wary).
  • Financiers Profile – consider how long the financier has been in the industry and if they have a strong presence in any particular industries.
  • Track Record – it’s perfectly reasonable to ask for case studies or references from your prospective financier. You may have queries regarding the usability of the facility or regarding the financiers account managers and sales representatives – which are often easily answered by a current client.
  • Additional services – check if your financier has the capability to help your business in other ways if the need arises, specifically:
    • Consider whether or not the financier can help finance the purchase of stock and/or inventory for your business.
    • Consider whether or not the financier can handle your foreign exchange exposure.
    • Consider whether or not the financier can help your business with its payments systems via credit card gateways or eftpos terminal technology.
    • Consider whether or not your financier can help recommend or introduce accountants.
    • Consider whether or not the financier can handle your equipment financing.

Most importantly, it is absolutely essential that your financier really understands your business. Your financier has to understand your businesses strengths, its weaknesses, its history and its trajectory. If you can find a financier that properly understands your business, you’ll extract more value out of the relationship and your financier is more likely to provide your business the edge it needs to reach its potential.


Moneytech is an Australian commercial finance organisation specialising in Trade Finance  (Credit Express) and Debtor Finance (Confirmed Capital). We aspire to become trusted partners of our customers. We support their growth by both understanding their business, and creating innovative financial products based on their feedback which fulfils their needs.  Continue to our website to learn more, or call us on 1300 858 904.