This accounting client is a fast growing, profitable wholesaling business.
The bank has been providing an overdraft facility for several years. The client was looking to bring on more employees and increase purchase orders for the growth. However, the client wanted to free up their personal property portfolio which the bank had as security.
The bank offered to increase the existing overdraft facility as the client’s property security was strong, but this didn’t fully resolve the working capital issues that the business had, due to the difference in timing between having to pay suppliers through to receiving customer/debtor payments on the other end.
The accountant approached OptiPay for a solution and in the end an equipment finance facility was put in place with the same bank, in order to free up cash and allow the client to repay the overdraft and hence release the property guarantees.
The client, off the back of purchase orders received, then implemented OptiPay’s Supply Chain Funding by utilising OptiPay’s money to pay suppliers “cash on delivery”, in order to take advantage of a 6% early settlement discount.
When the client delivers the goods to its customer/s, the Supply Chain Funding provided by OptiPay was then repaid from an Invoice Finance facility that OptiPay implements with the client. The buyer then cleared the invoice finance funding when their customer/s pay (as per their normal 45-day trading terms).
This solution provided an immediate improvement in GP margins (difference between the 6% settlement discount and the small fee charged by OptiPay) and eliminated the working capital required, by only having to repay OptiPay the net amount owing, 45 days later, when the customer paid our client.
The supplier funding from OptiPay allows flexible fundings and redraws on an ongoing basis.
The facility has limited recourse and no property security was required.
What the accountant said: “We initially thought the bank was the best option for our client, but we’ve learnt something new and genuinely feel we have added real value to our client and his business thanks to the innovative funding solutions provided by OptiPay”
“Get Tomorrow’s Cash Flow Today”
Who is OptiPay?
OptiPay, one of Australia’s leading business finance providers, has been dedicated to helping small business owners solve cash flow challenges for over a decade and has provided $1.5 billion in business funding to more than 500 Australian businesses. OptiPay specialises in modern financing solutions such as invoice factoring, invoice finance, debtor finance, and lines of credit. OptiPay’s mission is to support business growth providing liquidity in as little as 24 hours, ensuring they have access to tomorrow’s cash flow today. This rapid access to funds helps businesses maintain smooth operations and seize growth opportunities without the stress of cash flow constraints. At OptiPay, we believe that healthy cash flow is the lifeblood of any successful business. Our commitment to helping businesses overcome financial hurdles and achieve their growth ambitions has solidified our reputation as a trusted partner in the business finance sector. Whether you are looking to stabilise your cash flow, expand your operations, or navigate financial challenges, OptiPay is here to support your journey with innovative and efficient financing solutions.
