Quick answer
Sundry debtors are amounts owed to a business that don't come from its ordinary sales to customers. Typical examples are bonds and deposits, insurance claims, staff advances, GST refunds and loans to directors or related companies. They appear on the balance sheet as other receivables. Lenders usually treat them more cautiously than trade debtors and often exclude them when assessing working capital or invoice finance.
Key points
- Money owed to the business from anything other than normal trading sales
- Shown separately from trade debtors, often as other receivables
- Loans to directors and related entities are the item lenders query most
- Usually excluded from invoice finance and discounted in working capital tests
Open almost any small business balance sheet and, just under trade debtors, there’s often a smaller line labelled “sundry debtors” or “other receivables”. It looks harmless. For a lender reviewing the numbers, it’s one of the first lines worth a question.
What counts as a sundry debtor
A sundry debtor is anyone who owes the business money for a reason other than buying its goods or services. The word “sundry” simply means miscellaneous. Common examples:
- Rental bonds or security deposits held by a landlord or utility
- An insurance claim that has been lodged but not yet paid
- Advances or loans to staff
- A GST or fuel tax credit refund owed by the ATO
- Money lent to a director, shareholder or related company
- A deposit paid to a supplier for goods not yet delivered
- Rent owed by a subtenant
Trade debtors, by contrast, are customers who owe for sales. Both are receivables, but they behave very differently.
Why lenders treat them differently
Trade debtors usually turn into cash within a month or two, on a predictable cycle. Sundry debtors are less reliable. A bond only comes back when you move out. An insurance claim might be reduced. A loan to a director may have no fixed repayment date at all.
So when a lender works out your current ratio or working capital, it will often remove sundry debtors, or at least the related-party portion, from current assets. Invoice and debtor finance providers go further: they only fund genuine customer invoices, so sundry amounts never form part of the funding base.
Director and related-party loans get the hardest look. A private company that lends to a shareholder or their associate needs to handle it carefully, because under Division 7A the loan can be treated as a dividend unless it is repaid or placed under a complying loan agreement by the company’s lodgment day. A lender will want to know which applies.
An example of the adjustment
A building supplies business shows these current assets:
| Item | Amount |
|---|---|
| Cash | $40k |
| Trade debtors | $210k |
| Sundry debtors | $85k |
| Stock | $165k |
| Total current assets | $500k |
Current liabilities are $380k, so the business appears to have $120k of working capital. On closer inspection, $60k of the sundry debtors is a loan to one of the directors with no repayment schedule. The lender removes it, reducing working capital to $60k. The application still stands, but the business now looks half as liquid as the owner thought.
The fix might be as simple as a documented repayment plan, or the director repaying part of the loan before applying. Have that conversation with your accountant early. If you’d rather get a lender’s read first, our team can look at your figures.
Tidying sundry debtors before you apply
- Ask your bookkeeper for a breakdown of what’s in the account
- Chase or write off old items that will never be collected
- Document any director or related-party loans and their repayment terms
- Check that trade invoices haven’t been misfiled as sundry (or the other way round)
Run the before-and-after numbers through our working capital ratio calculator to see the difference a clean-up makes. Our aged receivables and balance sheet entries explain the neighbouring lines.
Balance sheet a little messy?
Most owners don’t spend their days thinking about how a lender reads the asset side of their accounts, and that’s fine. Tell us what you need and roughly how the business is going: the form takes around a minute and doesn’t trigger any credit check. One person reads it, not a panel of lenders, and they’ll phone you to work out what’s realistic. Precise answers help us steer you to a suitable lender quickly.
Frequently asked questions
What's the difference between trade debtors and sundry debtors?
Trade debtors are customers who owe you for goods or services you sold them. Sundry debtors are everyone else who owes the business money, such as a landlord holding your bond, an insurer processing a claim or a director who borrowed from the company.
Are sundry debtors a current asset?
Usually, if they're expected to be collected within twelve months. Long-term items, such as a director loan with no repayment plan, may be shown as non-current, and lenders often treat them that way regardless of how they're labelled.
Can I borrow against sundry debtors?
Rarely on their own. Invoice and debtor finance providers fund invoices issued to customers for completed work, so sundry amounts are normally excluded from the funding base.
Why does my lender care about a loan to a director?
It's money that has left the business and may not come back soon. Lenders also know a private company loan to a shareholder can have tax consequences under Division 7A, so they'll want to see how it's documented and being repaid.