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25 October 2018; finance brokers are increasingly recommending invoice finance as a solution to business cash flow problems, a recent study has found.
Invoice Finance specialists Apricity Finance conducted a survey of finance brokers in Australia and New Zealand, looking at how their clients coped with cash flow stress within a business. The survey found that while panic often sets in for many business owners, most brokers saw invoice or debtor finance as a solution to cash flow stress.
CEO Linden Toll said it was encouraging to see that brokers were able to help their clients find workable solutions that did not require taking on more long-term debt. “Our survey revealed that 75% of brokers recommended invoice finance first as a way to alleviate cash flow issues,” Mr Toll said. “Invoice finance capitalises on what’s ‘coming into’ a business rather than putting at risk personal collateral such as property or equipment. This allows a business to sustain and grow without taking on an extra debt that requires monthly servicing.”
The survey revealed cash flow issues can lead to significant stress for business owners, which commonly results in one of three standard reactions. First, businesses sometimes cease to pay off their own invoices - something that can be damaging to the business long term. Another common reaction is panic - something that will be damaging to both the business and the business owner. Encouragingly, seeking financial help is also a common response.
Finance brokers reported that businesses turning over between $500k and $5 million per year were the most likely to feel cash flow strain. This is likely due to two classic causes; chasing unpaid invoices and growing too fast.
“Talking to a finance broker would certainly be the most effective course of action, and lead to identifying the pain points within the business,” Mr Toll said. “Most brokers stated that they would conduct a financial review as well as seek negotiations on contracts that are adding to cash flow stress.”
For more information on invoice financing, get in contact with Apricity Finance, by clicking the following link: www.apricityfinance.com
About Apricity Finance
Apricity Finance We specialise in a single product – known as invoice finance (or debtor finance). Our solution allows approved businesses to have the invoices to their high credit quality customers paid faster. This reduces frustrating wait times and provides cash flow certainty.
We help small to medium businesses grow by reducing their most common pain point – cash flow stress.
Founded by a team of experienced investment management and finance professionals, our first office opened in New South Wales’ Southern Highlands in 2013. In 2016, we opened offices in Brisbane, Melbourne and Auckland.
+61 414 621163