Inventory Finance
Being one of the Australia's most important wine merchants made the recent expansion into mail order a natural hit with clients.
Stock
requirements rapidly increased to meet new sales. Having used their
available real estate equity to start the business some years ago, a
lack of working capital sources placed this expansion in jeopardy.
Through
a $700,000 inventory finance facility, orders are now made in bulk
combining up to 14 shipments. Supplier discounts and freight savings
received are well in excess of the inventory finance costs.
Without
the need for additional real estate equity, this leading retailer is
now able to increase their net profit potential by $1.57 million this
year.
Tailor made solution
A shoe designer who's business was experiencing rapid growth was forced to pay upfront for raw materials, manufacturing, and delivery, which caused significant cashflow shortages. Waiting up to 60 days for payment from retailers combined with season
peaks meant that growth was restricted, and at times there was
insufficient stock to meet demand.
Using a $1 million Inventory
Finance facility, they now have easy access to cashflow for stock
purchases year round, without any pre-sale requirements. They
can pay for stock upfront and align the loan repayments with receipts
from retailers.
Inventory finance is assisting this fashion
company achieve a $4 million increase in turnover this year which will
result in a significant rise in net profits.
Invoice Discounting
A
recruiting company has achieved phenomenal growth using a three-pronged
strategy of organic growth, acquisition and invoice discounting as the key
funding tool.
A
significant part of the recruiting company's strategic success was due to Invoice Discounting with one of the biggest Australian Banks.
Invoice Discounting
makes all the difference in an industry where payments take anywhere from 14-60
days to receive. Waiting up to 60 days for payment means a loss of cash flow
and an inability to take advantage of growth opportunities.
For
manufacturers, importers, and wholesalers with a spread of outstanding debtors,
Invoice Discounting can be an important strategy to assist growth.
In the
recruiting company's case, the receivables gap could potentially be a staggering
liability. For the first three years, the owner's recruiting company funded the
business out of retained reserves, juggling seasonal spikes such as quarterly
superannuation and GST payments. It was when the company needed finance to
acquire two complimentary businesses worth $700,000 that they approached the
bank for an invoice discounting facility.
The
business we are in has limited hard-core assets and therefore Invoice Discounting
is the most suitable form of finance. The best asset is the debtor, and
assigning invoices to the bank has been one of the best decisions the
company has made. The Invoice Discounting has proved perfect for funding our
strong expansion and providing peace of mind during seasonal spikes.
Now the
recruiting company is in an enviable position, with the ability to concentrate
on the business of recruitment without being distracted by the day-to-day
demands of cash flow. Without cash flow issues, the company is better
positioned to strategise about organic growth and potential acquisitions.