Cash flow interruptions are often much more damaging for small and medium-sized businesses than for larger enterprises. That’s because they don’t have the same ability to build up financial reserves and affordable credit options that they can use to cover costs in the event of any kind of financial disruption.
Predictable and reliable revenue doesn’t just help SMEs survive in a competitive environment; it makes it possible to follow through on development plans that’ll make those businesses more resilient and more profitable in the future. To help businesses bridge these financial gaps, Fifo Capital offers a variety of different tools to ensure that your revenues come in, in a steady and predictable manner.
Customer payment plans
Offering a payment plan on your own can be tricky. As a producer you’re forced to invest the cost of production up front, but you won’t recover that cost until most or all of the client’s payments have been received. This can make paying employees and covering other costs too difficult. To get rid of this delay, Fifo Capital offer customer payment plans. We issue the payment to you up front in full at the time of purchase, and the client makes their payments directly to us.
Payment plans don’t just make getting paid easier, they can help you grow your business. If you can offer financing, clients don’t need to save up a big lump sum to make their purchase. As a result, you’ll be able to attract customers who wouldn’t otherwise be able to afford your products or services.
Stock loans
Purchasing stock for resale locally or from abroad can be prohibitively expensive, especially for seasonal businesses who need to acquire a large quantity of products in anticipation of high demand. Stock loans and import finance are designed to help your business acquire the stock you need, and give you the time you need to sell it before repayment.
Fifo Capital will cover some or all of the cost of purchasing and shipping new stock so your ability to pay wages and keep the lights on, in the time between purchase and sale isn’t jeopardised. The loan is secured against the stock itself, so you don’t need other assets to leverage. You get up to 90 days to repay the loan, so there’s enough time to resell your goods and collect your revenue.
Invoice factoring
Invoice financing can be used both as an emergency measure, or to make payments more predictable in general. In the event of a cash flow disruption, you can sell one or several outstanding invoices to Fifo Capital to give yourself an advance before payment would usually be due. We pay you most of the invoice’s value up front, and then collect the payment from your client.
Alternatively, you could finance all of your invoices so that you always get paid on the same day that the invoice is issued. This way you know exactly when to expect payments, and you never have to worry about chasing clients down if they’re late.
Foreign exchange
One important, but rarely discussed, factor that can interfere with your business’ cash flow is exchanging money for international business deals. Using traditional banks, it’s not uncommon to lose up to 5% of your money to transaction costs and unpredictably fluctuating exchange rates. This can add up quickly, and result in serious unexpected financial issues if it isn’t addressed.
Fifo Capital is partnered with the leading international payment specialists at HiFX. Unlike your regular bank, they charge no (or very low) fees at preferential foreign exchange rates. Because they specialise in foreign currency exchange, they don’t have to rely on additional transaction fees to earn a profit for their business. Instead, they very carefully trade currencies at highly favorable rates to ensure that both they and their clients can benefit.
Using an exchange service like this is a great way to make sure that your business isn’t unexpectedly forced to overpay in international transactions. This helps to keep your international business deals within budget and under control.
Ensuring that your revenue is as predictable as possible, and that your costs remain within budget, are key to building a stable plan for your business’ future success. By taking full control of this aspect of your business, you’ll be able to budget for the future much more accurately. Furthermore, you won’t be forced to spend nearly as much time dealing with unexpected financial issues. As a result you can spend time on the issues that really matter to you: building and strengthening your business relationships, growing your business, and serving your customers.
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