Using flexible financing to drive targeted growth

By November 12, 2017 Blog, Business help No Comments
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Businesses rely on invoice financing, stock loans, supply chain finance, and other short term financing tools to help them keep cash flows stable in unstable business environments. Having access to these solutions is often key to a small business’ survival, and that of the people and businesses who depend on it. That does not mean, however, that alternative finance is limited to a purely reactive, financially stabilising role.

invoice finance, New Zealand

Used properly, businesses can use financing to invest in growth opportunities that wouldn’t otherwise be feasible, giving them the boost they need to establish themselves in a broader market, and to compete with larger businesses.

Boost capacity

Growing your business’ capacity without using financing support from a financial institution or investors of some sort is an incredibly slow process. Small businesses in particular often generate so little profit that this can almost halt growth entirely. For example, your business might have several major clients ready to sign on, but may not have the funds it needs to expand its capacity to serve those clients. While a larger business might easily have the financial bandwidth to hire and train a few new employees, provide workspace, and simply absorb their cost until the new client’s revenue paid off the investment, your small business needs to draw funds from another source.

Short term financing, particularly invoice financing and supply chain finance, are perfectly designed to help businesses build up that working capital in the near term. It allows them to make those necessary investments and cover their costs today against a future return that would otherwise be out of reach.

Break into new markets

Reaching out into new markets, both geographically and demographically, is a move that’s as necessary as it is unaffordable for many small business. While the advent of digital marketing has lowered marketing costs significantly over the last two decades, the time and resource investment is still very high for a small business with a tight budget.

Attracting attention in a new market means conducting marketing research, optimising product offerings, finding and building relationships with new distributors, and often paying for months worth of labour for marketing and sales efforts before you can reasonably expect to generate enough revenues to break even. The obvious solution for many entrepreneurs is to take out a business loan.

A regular business loan might make sense in theory, but your primary banking institution is unlikely to be willing to deal with a loan that’s sized for a small business, because their business model isn’t designed to work with relatively small loan amounts of under $1 million. To get a loan for under a million dollars, an alternative financial institution like Fifo Capital can accommodate you with a short term business loan as small as you need for your specific project.

Drive innovation and change

Entrepreneurs are typically full to the brim with innovative ideas, but don’t have the time or resources to realise them. A business can’t afford to try something new every week while remaining functional and productive, much less profitable. Making innovative changes means analysing new ideas, testing them, developing them, and eventually implementing them before they can finally begin to generate returns on investment.

The timeline for profitable success when conducting research and development is often uncertain, because great ideas or discoveries don’t tend to arrive on a schedule. Change management is also a finicky business, and can impact profitability in the near term that may need to be addressed. That uncertainty makes it particularly difficult to budget for, and businesses need flexible financing options to give them the bandwidth they need to see changes through without risking their business.

Used in combination with a business loan or invoice financing, supply chain financing is a great way to defer outgoing payments for up to several months while boosting working capital. This gives your business the time it needs to adjust timelines and finish implementing the innovative changes you need to make in order to remain competitive in your industry.

Growth related costs of all kinds are so difficult to tackle because they drain working capital against a payoff that often seems prohibitively far in the future. Many small businesses simply consolidate their revenues and try their best to operate conservatively in order to survive as long as possible. That, however, is just a slower way to arrive at a business’ ultimate failure.

Industries develop and evolve, and successful businesses are inherently those that grow and compete for leadership to help guide those changes. For entrepreneurs of all kinds, that means finding targeted solutions to manage your financial risks while driving growth in spite of the challenge.

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    What is spam?
    In the context of electronic messaging, spam refers to unsolicited, bulk or indiscriminate messages, typically sent for commercial purposes. “Electronic messaging” covers emails, instant messaging, SMS and other mobile phone messaging, but does not cover normal voice-to-voice communication by telephone.

    An electronic message may constitute spam if it:
    – is commercial in nature – i.e. it could be construed as offering a commercial transaction, such as goods or services for sale, or merely directing the recipient to a location where a commercial transaction could take place – is sent without the prior consent of the recipient;
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    Any commercial electronic message sent by Fifo Capital will include a clear and accurate identification information about Fifo Capital, the sender of the message and how we can be contacted. Fifo Capital will take reasonable steps to ensure that the identification information about Fifo Capital is accurate for a period of 30 days after the day on which you receive the electronic commercial message.

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    Under Spam legislation, every commercial electronic message must contain a functional and legitimate ‘unsubscribe’ facility. This is an electronic address the recipient can use to tell the sender they do not wish to receive messages.

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    – all commercial electronic messages sent by us will include a functional way for the message’s recipient to indicate that they wish to unsubscribe from any future messages;
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    If you receive a message from Fifo Capital that is not in accordance with the above, contact us and the matter will be promptly investigated and resolved.

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    Please contact our Anti-Spam officer at [email protected] if you have any concerns or complaints about this policy or about our use of personal information or other privacy issues.

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  • Terms and Conditions

    Fifo Capital understands time is critical when it comes to managing your cash flow – so our process is aimed to be as simple as possible.
    A Fifo Capital facility approval typically takes around 24 hours to set-up and depending on the required information supplied by customers, transfer of funds can take place in as little as four hours.

    The following covers the terms and conditions required for a four hour funds transfer to take place;

    1. Fifo Capital will tell the proposed client if the application is successful to receive funding. We can accept or reject the application at our sole and absolute discretion. If we accept the application the cash flow finance services will be provided solely in accordance with the documents we agree with the proposed client.
    2. Fifo Capital reserves the right to reject previously approved applications without notice and/or consultation.
    3. Fifo Capital’s application consists of a number of forms, however, not limited to fully completed and signed; Application, Receivables Finance Facility Terms and Conditions, Guarantee, Offer to Sell, and Privacy Consent forms
    4. To be eligible for a four hour funds transfer in relation to an approved application, the proposed customer must request or apply to Fifo Capital in writing before 12noon on the same business day. Such a request doesn’t guarantee the transfer will take place or funds cleared in the customer’s bank account within the four hour period.
    5. Should a four hour funding transfer request be approved, such a transfer can only be facilitated on a business day. A transfer request is not available on public or bank holidays, or weekends.
    6. Four hour funding transfers may incur a fee as detailed within the application.
    7. Fifo Capital’s aligned banks or financial institutions have the right to reject a four hour funding transfer request. Fifo Capital and its aligned banks are not liable for any loss or damages resulting from a funding transfer request not taking place or funds being cleared within a four hour period.
    8. Fifo Capital is a franchise business operation. Fifo Capital UK Ltd is the master franchisee and is therefore not responsible for the actions or inactions of its franchisees in relation to any funds transfer timing.
    9. Fifo Capital is not responsible for any loss or damages incurred or to be incurred by the would be or existing customer should a transfer not take place within or cleared funds not be received within a four hour period.

    To find out more about the full terms and conditions relating to our 4 hour funds transfer please contact Fifo Capital on 07812 334 564