With so many business funding propositions out there, and the financing landscape changing all the time, it is only right that entrepreneurs and managers seek to compare the options available. In doing so, the key is not just to look at headline prices but to closely consider their own business situation and ambitions, and match the funding choice to their needs.
For example, we have already seen that for growing businesses in sectors such as manufacturing, wholesale trade; and industrial trade services, amongst others, Supply Chain Finance can be the ideal solution. Not only does it provide them with the exact amount of funding needed to get the next order moving by paying their suppliers early, it also strengthens their supplier relations and ensures their partners can grow with them.
This specialised approach makes more sense for many companies even when a straightforward generalist solution such as a bank loan may allow them to raise more money: not only are there a range of benefits to well-suited specialist solutions, but they are also far more flexible. That can be crucial if your funding decisions are not to limit your growth.
Will You Outgrow Your Business Loan?
Let’s imagine your business has enough tangible assets and credit history to raise $1.0 million with a secured business loan: What if you borrow that $1.0 million now, over two years for example, and then 12 months down the line you find you’re growing faster than expected and need more cash? With your security exhausted, you won’t be able to access another loan at favourable rates, if you can get one at all.
Fortunately, in this situation, both Invoice Finance and Trade Finance could still be options, but what if you took out that loan and then things don’t work out so well? Committed to regular re-payments and interest charges, your business could rapidly find itself struggling to keep up and if the bank then takes action or levies default charges things can go downhill at frightening speed – even though your business is still profitable, and was only experiencing a bad patch.
Forms of equity finance, such as venture capital injections, offer a different problem: if you grow too slowly, you will face pressure from your new partners; if you are more successful than expected, you got yourself some very expensive funding.
Funding that Fits
Given the choice, most business leaders would naturally choose a funding system that is designed to always fit their needs and reflect their cash flow situation and ability to pay. If you are a business that sells to other businesses, this can be achieved by Invoice Finance.
With invoice discounting, you access the money tied up in your accounts receivable by raising cash from a company like OptiPay against your outstanding invoices. This funding is always paid off when your customer settles their bill 30 or 60+ days down the line, by which time you will hopefully have new invoices to offer for funding. These may be larger, because you are growing; or smaller, because you’re having a quiet patch: either way, the invoice financing automatically adjusts to your situation.
For businesses engaged in international trade, more specialist solution exists. Import finance and Export Finance, which both fall under Trade Finance are both similar to invoice discounting in that they will always be tailored to your present situation: they will be designed to fund a particular international order which you have placed or received, respectively. They can be used again and again, and come with a number of additional benefits designed to de-risk and facilitate importing and exporting activities based on the growth or contraction of your business.
OptiPay is able to offer a number of these cash flow funding solutions, platforming the form of: Invoice Finance; Trade Finance (Import Finance & Export Finance) and Supply Chain Funding, allowing businesses to tailor their fundings to their cash flow needs. Get in touch with a member of the OptiPay team to find out how much you could access to accelerate the growth of your business.
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.
