Terms of Debtor Finance Providers
Some providers have minimum terms, exit fees, notice periods, audit requirements, etc. that need to be fully assessed prior to entering into any agreement.
Due to the involvement by the financier with a factored customer, the advance rate on such invoices is higher than with a confidential facility. In addition, some facilities marketed as 'confidential' still require completion of anonymous 'audits' before invoices are funded.
Most financiers will fund invoices for up to 90 days from the month the invoice was issued, and will 'recourse' any invoice not paid by the end of the 90 days. 120-day recourse periods are provided in exceptional circumstances.
Providers in some countries will offer a non-recourse, or limited recourse facility, where the provider assumes part or all of the credit risk on a debtor. Other providers may insist on the client taking out credit insurance on their customers, with the policy and benefits assigned to the provider.
Credit limits may also be set on individual customers to minimise risk by some financiers, and 'concentration' limits might also limit funding available to major customers, or to specific classes of customers.
An in-depth knowledge of all these issues is essential to ensure that a debtor finance partnership is with a compatible financier.
Read more about this topic: Debtor Finance
Famous quotes containing the words terms of, terms, debtor, finance and/or providers:
“Certainly for us of the modern world, with its conflicting claims, its entangled interests, distracted by so many sorrows, so many preoccupations, so bewildering an experience, the problem of unity with ourselves in blitheness and repose, is far harder than it was for the Greek within the simple terms of antique life. Yet, not less than ever, the intellect demands completeness, centrality.”
—Walter Pater (1839–1894)
“Light is meaningful only in relation to darkness, and truth presupposes error. It is these mingled opposites which people our life, which make it pungent, intoxicating. We only exist in terms of this conflict, in the zone where black and white clash.”
—Louis Aragon (1897–1982)
“Every novel is a debtor to Homer.”
—Ralph Waldo Emerson (1803–1882)
“A bank is a confidence trick. If you put up the right signs, the wizards of finance themselves will come in and ask you to take their money.”
—Christina Stead (1902–1983)
“Good guilt is a product of love and responsibility. It is a natural, positive instinct that parents and good child care providers have. If bad guilt is a monster, good guilt is a friendly fairy godmother, yakking away in your head to keep you alert to the needs of your baby.”
—Jean Marzollo (20th century)