Debtor Financing, Use the money you possess

17 August, 2013

A company could own but not possess money

People owe each other money all the time; same is the case with businesses except the money is sometimes large enough to save a company from insufficient cash flow. Supplies are bought by someone and they usually do not pay in full until the entire product is sold. This means a lot of a company’s money is stuck in the market. This kind of money is included in the company’s receivables and this is the money actually owned by the company but not possessed by it.

If you receivables are pending, you can get loan

Banks offer 70-90 percent loans receivables; debtors are such loans, banks evaluate a company’s receivables and can give loan to the company because the company is capable of returning the loan when they possess the money. Good thing is that real estate security is not needed as in case with conventional financing; plus anyone can get the loan if they have pending receivables stuck in the market.

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