4 Advantages of Using Invoice Finance to Fund your Manufacturing Company
Manufacturing is an industry that needs high levels of working capital to be able to function and grow. It has a number of large fixed expenses including raw materials, rent, equipment leases and payments to staff and other suppliers.
High level of expenses often means that manufactures have trouble affording to offer their customer base terms of credit such as 30, 60 or even 120 days.
We recently helped the business owner of a medium sized Australian manufacturing company. His finance team had bought to his attention a looming cash flow problem. This client was due to make a large payment to upgrade some of his machinery and they knew that one of their larger customers were likely to pay their invoices after the machinery payment was due. The business owner had offered the large customer extended invoice payment terms to encourage larger orders and to help develop a trusted long term relationship.
How did Invoice Money help?
When our client spoke to their trusted accountant they were reminded that they had a number of business to business invoices that were due to be paid in the coming weeks. The manufacturer was $70K short of meeting the equipment upgrade invoice that was due the following week.
The accountant suggested that the business owner should consider invoice finance. He suggested Invoice Money and one other provider. The business owner set about doing their research and spoke to a number peers in the industry. Their next step was to place a call to our friendly and helpful team.
Invoice Money helped the business owner unlock the cash that was tied up in his debtors. We approved the manufacturing business as “factorable” and we funded a number of invoices to cover the machinery upgrade. The delighted business owner paid the equipment supplier and maintained his good business relationship with this company that was critical to their ongoing business success.
This is just one example of how invoice finance can help manufacturing businesses thrive. There are many advantages to using invoice finance as a cash flow facility. Here are 4 more.
Invoice Finance Funds Your Working Capital Gap
Every manufacturing business wants that large long term customer with very deep pockets that places extra-large orders. Offering them payment terms is a fact of doing business. It doesn’t change your own business obligations to pay your suppliers, staff, rent and leases as and when they fall due.
Invoice Finance Can Act as an Emergency Fund
Because there are no lock in contracts or monthly minimum requirements, a manufacturing business can use an invoice finance facility as and when they need it. We can fund a single invoice, a single customer or even your whole business turnover. It can also be done reasonably quickly in as little as 72 hours.
Use the Funds as you Wish
The money we advance you for your unpaid invoices is yours to use as you need. Pay invoices, wages, invest in raw materials or upgrade your equipment.
Invoice Finance gives you a Competitive Advantage
Access to finance can give you a competitive advantage by unlocking funds tied up in debtors. Not all manufacturing businesses or their advisers have discover the ease, efficiency and usefulness of invoice finance. What’s more, your invoice finance facility can grow with your company as the size of your invoices grow!
We love funding small and medium manufacturing businesses in Australia. There is nothing better than hearing the relief in a customer’s voice when they know that they will have funds in the bank to cover a working capital gap or large supplier invoice.
To find out more about how we can help your manufacturing business in times of tight cash flow, give our friendly team a call to have a confidential discussion about how an invoice finance facility can work for your business.
Invoice Money is the Invoice Finance provider of choice for SMEs. You can contact our friendly team here.