Funding is crucial to growth, and at OptiPay we’re delighted to help hundreds of Australian businesses to access the finance they need in order to expand. However, to build secure long-term growth most businesses will also need their supply chain to follow suit.
Imagine if you are preparing a big order for a new customer, and suddenly a small supplier goes bust. One minor component that is hard to source at short notice elsewhere has just scuppered your growth plans and left you in a tenuous cash flow position.
Fortunately, you can help your suppliers to grow with you. This is an important basis for business sustainability as you move from being a medium-sized operator to a major power in your sector.
Benefits of Supply Chain Finance
In recent blogs, we’ve seen how Supply Chain Finance benefits businesses which buy considerable amounts of supplies. By having a nimble finance company like OptiPay pay your bills immediately and then settling up 30, 60, or 90 days down the line, you gain a cash flow benefit and can confidently commission ever bigger orders from suppliers as your sales ramp up. The cost of this is often entirely covered by the early payment discounts OptiPay can negotiate.
We also saw how Supply Chain Finance benefits the businesses you buy from. By using Supply Chain Finance, you are effectively providing a cash flow finance service to all your suppliers. Without having to arrange a thing, they get the option to get their cash today: they can bring their accounts receivable forward by weeks or even months and use the cash to meet their own growing working capital requirements as healthy, expanding businesses.
Now we’ll look at a third way that Supply Chain Finance helps: by helping your suppliers, you are also helping yourself!
Security and Growth
For manufacturing or re-sale businesses that depend on a steady flow of quality supplies, one of the biggest risks to the business is having a supplier go under. If your growth puts pressure on their cash flow, that risk is increased.
Even if your suppliers are on a safe financial footing, they may struggle to meet your growing demands. That means you have to find additional suppliers and your business becomes more complicated. By using Supply Chain Finance, you can help ensure your suppliers have the funds to meet increasing orders and support your expansion.
What’s more, once your suppliers know that you are prepared to pay the minute, they dispatch the goods and issue an invoice, they will make your orders a priority. The sooner they fulfil it, the sooner they get paid: this is a far better incentive than the need to get an invoice out before the end of one month, so that they get paid at the end of the next – or the one after that.
Innovation and Good Relations
Naturally, this kind of arrangement makes for better supplier relations. With Supply Chain Finance, you become closer to your partners: you take responsibility not just for driving growth, but for helping them to finance it. This is an important part of long-term business building in sectors which require a reliable flow of quality components or finished goods to sell; or which depend on a chain of sub-contractors.
As your ambitions widen, you will naturally also want to improve your product, and invest in efficiency. Again, cash flow finance can help with this. But you will also need to upgrade your supplies. With Supply Chain finance, you can also help your suppliers to innovate and invest.
With just one financing arrangement that is non-recourse to the supplier and requires no security from either the supplier and the buyer (OptiPay’s client), Supply Chain Finance delivers a triple benefit: You improve your cash flow position, often for free; your suppliers get cash flow financing; and everyone gets secure foundations for long-term growth.
You can access all these benefits for no cost and no risk: just call OptiPay and let us arrange some very smart financing for you.
Get tomorrow’s cash flow today.