A revolution on the home front - with Invoice FinancePublished on 3rd September 2018 2018-09-03T12:29:11+00:00 - Last update on 11th September 2018 2018-09-11T15:31:22+00:00
The UK housebuilding market may be recovering from the financial downturn, but many of the old rules have changed. House buyers have become more demanding, insisting on high standards of equipment and finish throughout a new home. A look at the brochures from any of the top developers shows the focus on quality interiors.
Where, just a few years ago, a kitchen could be fitted to a basic specification with ready-made units, it now needs to have superior materials and facilities, and be individually designed. Other rooms, bathrooms and bedrooms must now feature high-quality fittings to appeal to your target customer. Imported taps and sanitary ware, materials like Corian and engineered timbers, and sophisticated appliances have all become standard.
This is good news for people considering a new home, and for interior design and fitting specialists.
At Rangewell, we work with many different businesses across the UK, and we recently spoke to one such company, based in the Midlands, about enjoying the boom.
“We’re a family-owned company with over 40 years experience in fitted furniture. We’ve never been so busy”
They provide the full service - designing, manufacturing and installing bespoke fitted kitchens, fitted bedrooms, and fitted home offices. In the past, they concentrated on individual orders but the increasing demand from local developers has provided them with a vast new market. However, it has meant they required a new approach to funding.
“Working directly with homeowners is straightforward. We take a deposit which would cover materials and basic costs. We get paid when the client is satisfied.”
A new way of working
Contracts with developers made it essential to work in a different way.
“With a large corporate client, we can look forward to relatively generous payments and ongoing work, often on a range of houses on the same development. The problem is, we don’t get paid as fast.”
In some cases, the developer might expect to sell a home before fully paying all the contractors who had worked on it. This means a problem when your interior design business has materials to buy in, and skilled carpenters and fitters to pay. While you might be able to arrange credit with some of your materials providers thanks to the increased quantities, your workforce will still have to be paid each week - even if payment from the developer will not be received for months.
Despite the high value of the work, it can lead to a serious cash flow problem while awaiting payment. If there is a slowdown in the market, it could even threaten your business.
Building a sound business with Invoice Finance
Funding the cash shortfall with a loan or a bank overdraft would be prohibitively expensive, but another solution could be Invoice Finance.
Invoice Finance can provide a steady flow of cash when large corporate customers are slow to pay you. With Invoice Finance, a lender will provide a cash advance as soon as an invoice is issued.
This means you can receive 90% of the value of each invoice you issue as soon as you issue it, with the remainder once the client pays, less the lender’s fees for the service. It has become the recognised solution for many types of business, from manufacturers to interior design specialists who work with larger, slow paying clients.
“We get paid when we issue an invoice - which we do as soon as soon as any job is signed off.”
Whatever your line of business, a call to Rangewell could help you get invoice finance working to support your cashflow. Apply today or find out more with Rangewell.
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