Having operated as an independent broker for over 18 years now the predictability that used to exist has completely disappeared. It was always reasonably certain, in years gone by, which months would be busy and which would be quiet.
Currently the trend is seemingly a reversal of historic norms and whilst this is of no real consequence, it is important businesses have the capacity to adapt, whether their own particular market is experiencing expansion or contraction.
Even if the market is unpredictable a business can ensure predictable cash positions by careful working capital management.
Invoice finance is an ideal product to accommodate periods of growth with the simple fact that the facility grows in line with sales facilitating this. A few months ago we concluded a facility for a small recruitment business, specialising in the temporary placement of catering, hospitality and exhibition staff.
The business has no physical assets and the Directors have limited personal assets. Their bankers were not prepared to help with finance. As we entered spring and early summer the business had a library of temps they could place and a strong network of clients in need of temporary staff.
The temps, naturally, want to be paid weekly and the clients want to pay after a minimum of 30 days from invoice date. This gap is plugged perfectly by invoice finance.
This week I spoke to the client and it was nice to hear their ringing endorsement of invoice finance. They have been able to place temps without worry. When they raise an invoice they receive 80% of its gross value straight away, giving suficient funds to pay, and subsequently keep, their temps.
They do not have to worry about a fixed limit facility, such as an overdraft, as the type of facility they have grows in a way that mirrors exactly their own sales
The nature of their business is both unpredictable and seasonal but the invoice finance facility accommodates both these potential problems.
We will happily help with sourcing finance and the preparation of efficient cash management tools. Just give us a call or email email@example.com