Most transport businesses experience cash flow problems at one time or another. Often, the main problem is that they have to wait 30, 60 or 90 days before clients pay. On the other hand, the business has regular expenses such as fuel, repairs and driver wages.
One way to solve this problem is to use debtor financing. Debtor finance helps transport companies, from local couriers to interstate line haul businesses, improve their cash flow. It provides the funding they need to pay expenses, operate the business and grow.
Which debtor finance programme is right for you?
Commercial Capital offers two debtor finance solutions that can help transport companies. Both provide similar benefits but are suited to help companies of different sizes.
Invoice factoring: Invoice factoring provides financing for individual invoices. It’s best suited for small and growing transport companies that need funding as well as credit and collections services.
Invoice discounting: Invoice discounting is a funding-only solution that helps larger transport companies. The solution finances invoice in batches and allows clients to perform their own credit and collections.
What is debtor finance?
A debtor financing programme allows you to finance slow-paying invoices from creditworthy commercial clients. Instead of waiting 30 to 60 days to get paid, you get immediate funds to pay for fuel, repairs and wages. But, more importantly, you can use the funds to take on new clients and grow.
How does debtor finance work?
Although our debtor finance programmes offer similar benefits, they operate differently.
Invoice factoring finances individual invoices, usually in two instalment payments. The first instalment, the advance, is deposited to your account as soon as you raise your invoices and submit them for processing. The advance covers between 80% and 90% of the total value of the invoices. The remaining 10% – 20%, less fees, is deposited to your account as soon as your client pays.
Invoice discounting, on the other hand, operates as a revolving financing facility. Invoices are financed as part of a batch. We can advance around 80% of the total value of the batch, based on certain credit criteria. The revolving line is adjusted regularly as your clients pay old invoices and your company raises new invoices.
The advance (first instalment) is one of the most important features of a debtor finance programme. Transport businesses need the highest possible advances so they can pay for their business expenses.
We can provide advances from 80% to 90%. The advance is determined based on your needs and the characteristics of your company.
Debtor financing is a cost-effective way to finance your business. The cost is based on the size of the facility, the quality of your invoices and your business in general.
Qualifying for our debtor finance programmes is fairly simple. The programmes are available to small and large businesses alike. To learn more and to have a representative contact you, fill out the enquiry form.
We can set up and fund your account quickly. The first funding can usually be done in less than ten working days. Subsequent invoice financing transactions can be done in as little as one day. Note that larger accounts or accounts with complicated situations may take longer to set up.
Your clients are an asset
One of the greatest advantages of invoice factoring and invoice discounting is that your clients become an asset from which you benefit. Your invoices are the most important collateral for the transaction.
This solution can work for small companies whose most valuable asset is a growing customer list of reputable companies.
Get an instant quotation
We offer debtor financing at competitive terms to transport businesses. To get an instant online quote, fill out this enquiry form.
Need more information?
To learn more about our programmes, read:
- What is Debtor Financing?
- What is Invoice Factoring?
- What is Invoice Discounting?
- How is Invoice Factoring Different from Invoice Discounting?
We provide debtor financing services to companies throughout Australia, including: