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Case Study: Manufacturing Company, North East UK
Invoice financing has been proven to help many companies get through difficult cash flow problems arising for a number of reasons. Case in point, a manufacturing company had successfully forged relationships with five companies. These relationships would prove to be lucrative in terms of generating growth. However, it would also cause problems with their cash flow. The problem was they would have to pay their suppliers substantially quicker than receiving payment from their customers. Credit terms offered to their clients were, on average 60 days, whereas their suppliers were demanding payment within 14 days.
After discussing this case with a lender, a confidential invoice discounting facility was offered; meaning cash would be readily available to the client within 24 hours of an invoice being raised. This allowed the client to pay their suppliers well within the credit term provided. This allowed them to take on considerably more work.
After 2 years of using the invoice discounting, it is apparent just how effective the facility has been. Their turnover has increased from £2.5m to £4.5m. Since using the facility, they have increased the number of staff they employ and are looking for more business without worrying about how to fund the expansion.
“Compare Factoring were extremely helpful. At first, I had no idea how to fund these contracts and I was worried that I would have to pass up on all of this new business. They have helped me find a tailored agreement and our business has never been in better shape. The lender understands how our business works and the relationship with the account manager is brilliant.” – Managing Director
"Target Business Assist have provided our business with a new invoice factoring system that has dramatically improved our cash-flow position and flexibility with our clients..."
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