Debtor Finance For Labour Hire Firms

Labour Hire and Debtor Finance

Many labour hire companies use debtor and invoice finance to cope with sudden spikes in demand.

One company in Tasmania , which provides services to the mining and energy sectors, found that almost overnight its staff numbers increased from 4 to 40 with the resulting wages bill causing a real headache.

Problem

The problem was that the company had to pay its staff either weekly or fortnightly, but clients were invoiced only after the work was completed and paid 30 days from the end of the month.

The owner says the company needed a financing option which guaranteed cash flow and was flexible enough to grow with the company.

Solution

The solution was provided by a financier who specialised  in debtor finance for  labour hire firms and was very comfortable with the industry.

An added bonus was that the owner did not have to use his personal property as security for the funds which would have been required if he had increased the overdraft with the bank.

Effort

According to the owner, the finance provider made a special effort to learn about his business and work with him to design a facility that worked perfectly.

This success story was sourced from the Debtor and Invoice Finance Association of Australia which is the peak body representing debtor and invoice finance providers.

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