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How Debtor Finance Can Help Cashflow



Date: 01/12/2010

How to keep the cash flowing, especially if your business is growing.

With more than 30 years' experience in banking, Bob Ada, Head of Debtor Finance at BOQ, has seen all too often how inattention to cashflow can lead to business failure. And the problem can be made worse by rapid growth, when additional costs run ahead of debtor payments. His advice is to consider all forms of financing, and not to overlook debtor finance. Unlike overdrafts, which are secured by property, debtor finance is secured by the business's debt book. As the business grows, so does the facility, with interest charges reducing as a percentage of turnover. Business owners who can negotiate discounts with their suppliers for early payment can use the facility to pay those bills, while offsetting their own interest charges. Bob Ada says understand where your business is heading, have a written business plan, then sit down with your accountant and bank manager to look at all the options. And don't overlook debtor finance.

  

Topics: Business Growth, Financial Management, Management


Bob Ada, BOQ