Debtor Finance is a solution many start up companies use to get on track.
For example, a start up engineering firm in Brisbane was offered a large contract providing maintenance services to a multinational company.
It was the firm’s first customer and a big opportunity….but there was a problem.
The client insisted on payment terms of 60 days. That meant the owners of this small start up would have to fund staff wages for 8 weeks without any income from the job. The strain on cash flow would be serious, if not fatal, at this stage of the business.
Initially, they asked the banks for help, but none was interested. However, their local bank manager pointed them towards a lender who specialised in debtor finance for start up companies.
The debtor finance provider was more than happy to listen to their story and after conducting its due diligence, was satisfied that the owners had the expertise and experience to operate the business successfully.
It was also satisfied that the multinational was a good debtor who paid its bills.
As a result, the financier agreed to provide debtor finance for the start up and within hours of invoices being issued was able to deposit funds into the firm’s bank account which enabled it to pay staff and meet its overheads.
The facility put the company on solid ground so that it was able to build its business into a thriving concern which no longer requires a debtor finance facility.
This success story was sourced from www.singleinvoicefinance.com