Cash flow isn’t the problem. The right solution is.
Cash flow and profitability are not the same thing
A business can be profitable on paper and still experience significant working-capital pressure. In fact, growth itself can create the problem. Win a major new contract and you may need more staff, materials, equipment or inventory before receiving the first dollar from your customer. Increase sales rapidly and suddenly there is considerably more money sitting in receivables.
That isn’t necessarily a sign of a business in trouble. Sometimes it is a sign of a business going somewhere.
Solution is the key
When a business needs working capital, the conversation shouldn’t start with “What loan can I get?” It should start with “What problem am I trying to solve?”
Because not every cash-flow problem needs the same funding solution. If the pressure is being created by money consistently tied up in outstanding invoices, taking on a fixed loan may solve today’s cash shortage without addressing tomorrow’s.
A revolving facility backed by receivables can move with the working-capital cycle of the business. As invoices are raised, the business can access working capital. As customers pay, the facility reduces. When capital is needed again, the business can draw again without applying for another loan. The funding follows the business.
Your invoices are an asset
Australian businesses can have significant value sitting on their balance sheet in the form of unpaid invoices. CreditLine by FinanZor is designed to unlock that value.
Eligible businesses can access a revolving line of credit backed by receivables, with facilities from $250,000 to $5 million. The business remains in control: no requirement to establish a new bank account, no routine customer notification, and the business continues managing its own invoicing, collections and customer relationships. Eligible domestic and international receivables can also be considered.
Good businesses shouldn’t be held back by their own invoices
Capital should help a business move: take the next contract, negotiate confidently with suppliers, pay staff, invest in growth, navigate seasonal pressure and make decisions based on opportunity rather than the date an invoice happens to be paid.
The answer isn’t always more debt. The answer is finding the right capital structure for the problem you’re trying to solve. Because when it comes to cash flow, solution is the key.