For so many SME’s, forward planning is not a priority. As many of the companies are owner-run, time is in short supply. The scheduling of forward planning sessions is essential to scope the projections for the next quarter. You need to know what will get you there.

The Covid-19 pandemic caught many businesses off-guard.  A lack of funds, access to credit, and a plan against business disruption caused many companies to shut their doors.

If these companies had planned, they might have realised the need for overdraft facilities, lines of credit, and even growth strategies.

Even if you don’t actively using credit for your business, it is always a good idea to have a facility available to you when your company is doing well. Don’t wait until you are in financial distress to make credit applications.

There are many types of credit and financial aid you can use in a small enterprise.

Apart from the usual credit card and overdraft facilities that traditional banks offer: You can also look at these options:

Invoice discounting

Companies required to outlay funds to fulfill an order. As a promotional clothing company, they know that they will only get paid on delivery.

The time between the order being placed and the payment being received can be from 30 days to 3 months. Large orders, which can be a game-changer for a small company, are often out of reach. They don’t have the funds available to make the initial payment.

Strategies like 50% upfront payment from the client can cover some of it, but there is always a shortfall.

Using an invoice discounting facility allows you to offset your invoices against a loan that will enable you access to funds ahead of the order being completed.

Purchase order finance

Again, this is for small companies who have received the approval to execute the job. Payment is often delayed until the order or assignment is completed. It is usually the large corporates who issue the PO as a promise to pay on delivery. These may take longer than a few months to fulfill, so based on the PO; you can access funding, knowing that there will be a payment at some stage.

If you are unsure of what kind of finance will suit your business, call our agents to discuss how Bizcash can help your business survive any downturns and funds for your growing business.

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