Why do lenders who offer debtor finance only fund a certain percentage of invoices from a single customer, even though that customer may be a blue chip company, with very low risk of default? Is there a way to demonstrate that this risk is very low?

Hi Nathan. The industry standard is to fund the invoice to 80%, with the remainder paid to you, less fees, once the invoice is paid.
The acceptance of invoices is only made once the lender is satisfied that the debtor is good for the money.
Only a few lenders deal with single invoices with the majority wanting to control your complete debtor ledger.
Invoice funding is a great way to improve your cash flow without the need for you to put up security.
Wishing you well with your business..

Hi Nathan, with any lending there is risk attached to higher percentages which would be modelled in a general sense by the applicable lender upon entry to the market and not per client, although they may have tiers. It also doesn't allow for a margin for error and potentially coverage for the lender fees.

Regardless most debtor financing goes to 70-80%, so I'm assuming your querying if anyone will go 80-100%. The answer is yes, there are lenders who will go to 100%.

Regards Ariel

The best way to secure a debtor finance solution is to appoint a qualified Commercial Broker that has access to many varied solutions and can present you a number of options .

What industry is this client in ?