A financial solution for an uncomfortable problemPublished on 3rd September 2018 2018-09-03T12:10:32+00:00 - Last update on 2nd October 2018 2018-10-02T10:50:44+00:00
To create and run a successful business, innovation is simply not enough. Even if you have a great idea that provides an effective answer to a real need and a ready market, it can have very little future unless you have the financial solutions to support it.
One inventor who knows the importance of the right financial solutions found them with Rangewell.
She had been able to secure support for her simple, but effective, invention - a women’s clothing accessory designed to increase comfort when wearing certain clothing styles. This had allowed her to set up a manufacturing facility, and she was able to use her professional communications skills to market the product.
Her target market of fashion-conscious women of all ages is well-served by retailers, and she was soon able to build up a full order book.
She had been able to ensure that her product would sell at a price point that could provide a worthwhile profit. She had little difficulty negotiating lucrative contracts with retailers, but she soon found that she had run into a problem shared by many manufacturers - cashflow.
An uncomfortable truth
Her own production facility was relatively simple, requiring some basic plastic mounting, finishing and packaging. However, she needed to cover the usual costs of suppliers, staff, premises and overheads.
The 30 days + payment terms that are usual in the retail sector meant that she had no way of covering those costs until her retail customers paid.
Despite the obvious demand for her products, as a new business, she would find it difficult - and costly - to find funding to help the fledgeling operation deal with this challenge. Loans would be prohibitively expensive, and the older-style solution of a bank overdraft would simply not be available.
Providing financial support
She realised that the answer could be Invoice Finance. Many manufacturing SMEs find that they are at the mercy of the businesses they supply, and frequently face real cash flow problems caused by late payments.
Invoice Finance can provide a steady flow of cash, even when customers are slow to pay. With an Invoice Finance arrangement, a lender will provide a cash advance as soon as an invoice is issued by you.
This can mean that, as a manufacturer, you can receive 90% of the value of each invoice you issue as soon as you issue it. You can then receive the remainder once the client pays, less the lender’s fees for the service.
Back in style
The business owner found that Invoice Finance was the perfect solution for her needs, and realised that she could rely on it to support growth. However, when her Invoice Finance provider abruptly ceased trading it looked as though the business would face a fresh financial crisis - especially as the owner had already begun a planned expansion of the operation.
Fortunately, she called Rangewell. As experts in business finance - and truly independent - we were able to find an alternative provider eager to help after the failure of the original lender. Thanks to our contacts across the entire UK lending market, we were not only able to find a new lender to offer the scale of funding required but were also able to increase the level of the funding provided by the facility.
If your business needs a solution for cashflow worries, and you think Invoice Finance could be the answer you need, apply today or find out more with Rangewell.
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