Did you know cash flow worries are regularly reported as the leading stress point of small to medium-sized businesses?

Issues like late payers, seasonal downturns, government red tape and lost productivity due to unexpected circumstances (think a global pandemic!) can make managing your cash feel more like frustration than flow.

Fortunately, you don’t have to live with a constant battle between outgoings and incomings.

Several finance solutions can keep your balance sheet well-poised for meeting your financial commitments, as well as business growth.

Here are some working capital and funding options that could help your business.

1. Invoice finance

Invoice finance allows you to quickly access cash from a credit sale and use it to pay down debt or fund more sales. In essence, it involves selling your accounts receivable in exchange for a cash advance. Invoice finance can grow in tandem with your business, and generally doesn’t require any property assets for security.

Some benefits of invoice finance include:

  • the ability to access funding without committing to long-term debt
  • flexibility, with no monthly interest or repayments
  • creating capacity to scale up quickly and take on larger contracts.

2. Trade finance

Trade finance is commonly used to fund import/export transactions and is a type of working capital.

For import businesses, it means you can receive funding to pay a supplier while allowing time for the goods to be received, sold and turned back into cash. This closes a cash flow gap, plus allows you to negotiate bulk buying/early payment discounts with suppliers. You could use it to buy more stock to fulfil large orders, access discounts or take advantage of seasonal order cycles.

For export businesses, it provides working capital until your overseas customer pays for the goods or services you have delivered. This closes the gap between manufacturing and payment, thereby freeing up working capital. You get paid faster and only repay when your customer pays for the goods.

These are just a few of the business finance options available. It’s crucial to find a finance solution that best suits the needs and goals of your business.

Click here to access more research related to the New Zealand market or get in touch to talk through your funding options.