Our business specialises in steel fabrication for a range of industries including construction, mining and petrochemical. Since the global financial crisis in 2008, increasingly we have experienced extended payment terms with our multinational clients. Often pushed out to anywhere between 45 and 60 days, this is something that is hugely crippling to our business.
In addition to this, we have seen the banks become progressively more conservative in regard to lending. Ten years ago, we had an unsecured line of credit available to us, however, the current climate means that in order to access a loan or overdraft you have to put your house on the line. This is of course a very risky position to be in.
For a small business like ours, cash flow is critical. We have obligations to pay our creditors and the wages of our employees. In some cases, we have a huge outlay up front to do the job but don’t get paid ourselves for months.
We had to find a way of smoothing out our cash flow and met with Apricity Finance to see whether setting up an invoice finance facility could help our situation. We have now had a facility with Apricity Finance for a number of years, and have developed a great relationship with them.
For us, the best thing about invoice finance is that you don’t have to offer up your house as security. You are not locked in and can use it as much as you need to. Invoice finance has allowed us to adapt to changes in the market, manage our cash flow and focus on doing our job.
We just wouldn’t be able to exist without it. It allows us to pay our creditors and our wages on time – it takes the lumpiness out of our cash flow.
Co-owner & MD, Steel Fabrication Business
If you would like to know more about how Apricity invoice finance is different from other facilities, please read here.