Invoice Finance Calculator
Debtor Book Value Calculator
Estimate the usable value of your debtor book for invoice finance. Understand how lender exclusions reduce the gross book to an eligible, fundable figure.
Enter your debtor book details
What is Debtor Book Value?
Debtor book value is the total outstanding amount owed to a business by its customers. In invoice finance, the eligible debtor book determines the maximum funding available under a facility.
How is eligible debtor book value calculated?
Invoice finance lenders start with the gross debtor book and subtract ineligible debts. The remaining eligible book is then multiplied by the advance rate to determine available funding.
Total Exclusions = Overdue + Concentrated + Overseas + Other
Eligible Book = Gross Book - Total Exclusions
Available Funding = Eligible Book - Advance Rate
For example, a £500,000 debtor book with £110,000 in exclusions has an eligible book of £390,000. At an 85% advance rate, the business could access up to £331,500 in funding.
Common exclusion categories
| Exclusion | Why lenders exclude it |
|---|---|
| Overdue debtors (90+ days) | Higher risk of default. Payment significantly past terms. |
| Concentration excess | Over-reliance on a single debtor increases portfolio risk. |
| Overseas debtors | Harder to collect and enforce. May require credit insurance. |
| Disputed / contra | Payment is uncertain. May be offset against amounts owed. |
| Intercompany balances | Not arm's-length transactions. Cannot be independently verified. |
Assumptions and caveats
- •Exclusion categories and thresholds vary between lenders. The 25% concentration limit is illustrative.
- •Some lenders include overseas debtors if covered by credit insurance.
- •Advance rates depend on sector, debtor quality, and the invoice finance provider.
- •This is a guide only. Actual eligibility is determined during the lender's due diligence process.
Worked Example
Scenario
A staffing agency has a total debtor book of GBP 420,000. Of this, GBP 35,000 is over 90 days old and GBP 18,000 is in dispute.
Calculation
- Gross Debtor Book = GBP 420,000
- Less: Over 90 days = GBP 35,000
- Less: In dispute = GBP 18,000
- Eligible Debtor Book = 420,000 - 35,000 - 18,000 = GBP 367,000
What This Means
The eligible debtor book for invoice finance purposes is GBP 367,000. At an 85% advance rate, this would provide available funding of GBP 311,950. Invoice finance providers typically exclude aged debts (over 90 or 120 days) and disputed invoices from the funding calculation, so maintaining debtor book quality is critical to maximising available funding.
Frequently asked questions
Debtor book value refers to the total amount owed to a business by its customers (trade debtors). For invoice finance purposes, lenders assess which invoices are eligible for funding and exclude those that carry higher risk, such as overdue or concentrated debts.
Lenders commonly exclude invoices that are significantly overdue (typically 90+ days), debts from a single customer that exceed a concentration limit (often 25-30% of the book), overseas debtors without credit insurance, and any disputed, contra, or intercompany balances.
The eligible (usable) debtor book is the starting point for calculating how much funding an invoice finance facility can provide. The lender applies an advance rate (typically 70-90%) to the eligible book value to determine available funding.
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