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Corporate credit for the financing of the debtors

A growing profitable company often has growth in debtors due to growth. The money is often fixed in these debit hours and can only be used for paying invoices when the debtor pays. This situation can cause a cash requirement. A business loan is therefore often required for this. This can best be financed with a business credit such as a current account.

The current account

The most commonly used form of financing for debtors is the current account. The current account credit is a freely withdrawn amount. With a business account current credit you finance investments with a short term and absorb financial fluctuations. As an entrepreneur you always have enough working capital available.

The amount of this amount will be discussed with you beforehand. Within the agreed limit you can therefore withdraw money and top up when you want. This business loan can be used, among other things, to finance debt growth.

The focal points of a business credit of debtors

  • A company credit for the financing usually fluctuates with the position of the debtors. It is therefore important that the money is used for this.
  • Securities are usually required for financing through a current account. This is usually the pledge of the debtors, but other securities such as real estate, stocks or machines or securities in private can also be issued for this.
  • If you no longer meet your payment obligations, the financier can seize this.
  • A floating interest rate is linked to a current account credit. The interest can fall, but also rise. This allows your monthly expenses to be higher.
  • The quality of the debtors is important here. Usually the outstanding invoices of these debtors can not be older than 90 days. Make sure you keep the debtors well behind the rags if they pay late. Because old invoices are not financed. Make sure you put the latest payment date on the agenda and call if you are late. Calling is more personal than writing letters and often more effective. Please note that you also remind persistent defaulters in writing of their duties, which provides evidence if you should unexpectedly resort to judicial recovery.