Australian Invoice Finance’s latest client, an eyewear wholesale supplier and owner of optometrist outlets and convenience stores, recently met the maximum capacity of its financial resources.
There was overwhelming customer demand for its eyewear products but the client could no longer fund business operations. The owners needed more working capital to buy stock and fund slow-paying debtors.
The customers were all creditworthy but they all paid between 30 and 70 days after delivery of stock. The cash flow could not support this.
Additionally, the client had taken on larger national customers which generated larger stock orders. The business was set to grow by 50% over the coming six months. However, the client had become quite concerned about how to fund these opportunities.
The business required a trade finance facility to fund stock purchases from China and an invoice finance factoring facility to fund the debtors sales in Australia.
With this invoice finance factoring facility from Australian Invoice Finance, the client now has strong and positive cash flow in place for the future. This means that it can pay its local and overseas suppliers, wages and taxes on time.
Getting the finance mix right has been a great outcome. The directors have been able to grow the business without using mortgage security. The mismanagement of sales growth also caused a great deal of stress which has now been alleviated.
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Find out more about how AIF can help your business take control of cash flow through a factoring facility.