The Australian manufacturing industry contributes about $100 billion dollars (about 6%) to the GDP and employs over 900,000 people. In New Zealand, the industry is on a similar trajectory contributing $24.3 billion dollars and employing over 240,000 people.
Manufacturing is a working capital-intensive business, often with significant front-end investment by the business upfront. Financial outlay may include raw material costs, production space, equipment hire or purchase, staff expenses, storage and distribution.
What does this mean for SMEs in the Manufacturing sector?
Cash flow stress brought about by long production times and delayed payments is an unfortunate fact of life for many SMEs in the manufacturing sector. As demand for manufacturing increases, so does the pressure on operators to lock in contracts, purchase materials, increase their workforce and capitalise on growth opportunities. For businesses to remain competitive, pursue growth and maintain good cash flow to deliver, invoice finance is an ideal solution to help close the gap between when you invoice your customers and when you receive payment.