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This case study illustrates how invoice finance for an engineering firm rescued the owner from a potentially embarrasing predicament,
Our client offered specialized engineering services to infrastructure projects.
It was a small relatively new company with a reputation for good work. The client wanted to build on this and was ambitious for growth and success.
So, he was over the moon when he won a tender to assist in the construction of a large new facility for a multi-national company.
It was worth a lot of money. But, while he was focussing on the rewards he didn’t give a lot of thought to cash flow.
He soon realised that the downside of this “great” contract was that the multinational’s payment terms were 60 days from the end of month in which invoices were issued.
When we met, he was sweating on a payment of $150,000 which wasn’t due for a further 30 days.
He had no working capital available to meet his obligations.
He had gone cap in hand to the bank but it wouldn’t help him.
His worst fear was that he couldn’t pay that week’s wages.
He absolutely hated the thought of disappointing his staff some of whom relied on the money coming in week to week.
He also hated the embarrasment and loss of face he would suffer.
We were the right people to call because many of our colleagues have a blanket policy of declining finance to companies involved in construction. We judge applications on a case by case basis and in this case were able to approve his request for funds.
Three days after receiving his application we approved a new invoice finance facility for his firm and advanced 80% of the value of the $150,000 invoice.
That gave him enough money to meet all his commitments and much needed breathing space.
At the end of the month, when the invoice was paid, he received the remaining 20% less our fee.
It was a quick, flexible and very customer focused solution which helped him get through a sticky patch.
He particularly liked that we did not ask him to sign a long term factoring contract. He could come and go as he pleased.
We did not require his home as security and our transparent pricing meant he knew his exact costs upfront.
Here’s where to go to find out more about invoice finance or any other business.