The industry: Paper Product Manufacturer
A business-to-business company with international operational and in a highly competitive industry.
What is happening:
The business needed $1,000,000 of Invoice Finance for cash flow to support growth in demand for paper products industry and pay the overseas creditors pre-shipment. Goods are purchased from China and India based on cost quality but large volumes on short terms created a funding issue. Despite operating profitably and a strong balance sheet, servicing and security issues prevent it from securing bank credit. The directors do not want the risk of offering property security to any lenders. The money was needed to secure stock for the next 6 months from a new supplier.
Our Invoice Finance Solution:
Australian Invoice Finance provided an invoice finance facility at 85% of debtors owing with an over-advance of 5% on settlement day. The client managed the collections and AIF was able to assist with all other credit functions such as advice on slow paying debtors. AIF pays the remaining 15% of the invoice value, less a fee, upon receipt of outstanding invoices. AIF and the client mutually agreed on this type of Partnership Invoice Finance funding solution.
AIF’s invoice finance facility was very competitive against the traditional overdraft option but, unlike a bank loan, it did not require personal property as security. Finally, this paper products business is comfortably funded and operating well within its expanded cash flow. The future now looks very bright indeed.