Our client is a provider of specialist signs and scoreboards.
There business had been steadily growing for a few years and they’d now won school and government contracts which was a massive step up.
What also changed was their payment terms.
Their contracts to government and schools were strictly payment on end of month terms after completion compared to previously receiving a deposit and progress payment for their work.
Being a small business this exciting growth opportunity had created a seemingly impassable cash flow challenge as, without a deposit, they couldn’t order the supplies they needed to complete the contracted works.
The business owner had previously used an unsecured loan to cover this gap and, while this had worked for one job, they were then left trying to raise capital for future work while now also servicing a term loan.
Believing there was no solution they found us via our website after other loan providers and brokers had been stumped because the client’s current low cash balance was something they couldn’t look past to get to an approval.
Most lenders application pathways are built for speed and credit staff are trained based on the majority of circumstances that relate to their product’s approvals.
If a broker introduces an application for the wrong product lenders won’t identify the right solution.
This means a low cash balance will result in an automatic decline at most lenders.
Added to this, most brokers are either home, commercial property or equipment finance specialists and don’t understand cash flow needs sufficiently to identify when an unsecured loan isn’t the right solution.
We could see a different approach.
We approached a lender outside of an automated credit process and workshopped the client’s circumstances, highlighting their purchase orders from debtors that always pay and explaining how their working capital need worked.
We presented the client’s negative attributes as a symptom of not having the right credit in place to support growth so they could see the opportunity rather than a poorly performing business.
The lender agreed the business owner’s current predicament would be resolved immediately with the right working capital solution and an approval for a selective invoice finance and line of credit was achieved.
Importantly both of these facilities were free from ongoing fees so had zero establishment, line, monthly, management and service fees which can all be a feature of some invoice finance or line of credit products.
Minimising all of these fees can make a massive difference to the cost of your finance.
Our client was beyond happy and after settlement has continued to keep us updated with how they’re moving forward with their business and the difference we’ve made.
Working capital and cash flow sorted 👌
