Items sold ‘inter-company’; or to consumers rather than businesses; or on a sale or return; or ‘pay when paid’ basis’, will not be fundable. Contractual debt involving stage payments, construction industry style ‘applications’ debt or contracts involving liquidated damages clauses or extensive warranty periods are all difficult to arrange funding for because of the problems a lender will face in collecting these if your business fails.

Finance can sometimes be arranged at lower rates of advance than normal. Lenders vary in their appetite for ‘export debt’ and the degree to which they are concerned about ‘concentration’ (where a large part of your debtor book is with a single debtor).

Where a debt is due from a supplier which may be able to claim a contract, or amounts are over 90 days old, lenders will set aside reserves to cover these balances which will restrict the funds you can draw down.

The impact of these reserves will be to reduce your effective percentage level of advance.