- 14 Oct
Debtor Backed Loan With No Trust Account
If you are looking to get out of factoring you might be interested in an option that presents a halfway house solution. This particular product offering is what could be described as a debtor backed loan.
No Trust Account
It is early days with the provider, we are in the process of agreeing terms, but is an interesting product that could be very attractive to businesses that are concerned about having funds paid into a trust account by customers as this product eliminates that. There is no trust account.
With this particular product offering the amount of your loan, which can be over a term of up to 6 months, is agreed as a proportion of your outstanding debt a book. The level of funding can be up to 100% of the value of your debtor book.
The interesting part about this product is that you continue to receive your customer payments direct into your bank account, whilst making the monthly repayments on the loan. In this way, you don’t have to have a factoring company involved with your debtors in any way. Your debtor book purely serves as security should you default on the loan.
The pricing for the facility is straightforward, with a monthly interest charge in respect of the funds that you have drawn down. In this way it is about as straightforward as pricing can be.
In order to qualify for the product, you have to have been trading for at least six months, and you have to have a reasonable credit history. However, there are no requirements for homeownership, although the prime movers of the business will be expected to provide a personal guarantee. Providing you sell on credit terms to other businesses, a broad range of different industry sectors can qualify for this product, including the construction sector or other businesses that have contractual obligation as an integral part of their sales. This might be suitable for industry sectors that have had difficulty finding traditional forms of invoice finance. This is due to the lender being prepared to take a flexible approach to contractual debt.
Getting A Quote
If you are interested in getting a quote for this kind of facility please get in touch by calling Sean by calling 03330 113622.