Do you have enough capital in your Business?
The majority of our clients come to us because they need a flexible nonbank lender. The traditional lenders like the banks do not provide flexible cash flow invoice finance facilities. The fintech lenders are generally a short-term fix for cash flow issues. Factoring or Invoice Finance is a medium to long term solution to fund business transformation and sales growth.
It’s interesting that many businesses are undercapitalised and use a number of lenders to finance their business. Often these lenders are the shareholders, the finance companies, the bank, the Australian tax office (ATO) and their trade creditors. All of these creditors need payment at some time. Some of these creditors will not be patient and will take action against you if you do not pay them in a reasonable time.
If customer paid quickly then working capital would not be an issue for some many SME business. So, the biggest challenge for SME’s is getting paid by the customers for the good and services they sell. Often debtors or customer’s pay somewhere between 45 and 75 days end of month. This is too slow for many business owners. Remember the old saying “the longer the client takes to pay the harder it is to collect the debt”. Slow paying customers put enormous pressure on the business and financial distress on the director and shareholders of the business.
The success of invoice finance globally and in Australia is purely because Invoice Finance will advance money on outstanding invoices and bring forward the cash flow considerably reducing the debt turn of the client. Invoice Finance will improve the cash flow of the average client by four times. If you would like this explained, please contact one of our Cash Flow Finance Specialist.
Find out more about how invoice finance can help your business:
Click here to contact an AIF invoice finance expert who can help your business with turnaround finance.