Quick takeaways if you’re in a hurry:
When businesses experience a lack of cash they often don’t have time to prepare for it
Invoice finance is a short term solution that requires minimum security and can be quickly set up
Short term business loans work alongside existing finance facilities and are flexible to needs.
Read on: Short term business finance options – which suits you?
(estimated reading time: 7 minutes)
Businesses that experience a lack of cash rarely have time to prepare for it. And when reacting quickly to a short term funding shortage, it’s easy to commit to finance without truly understanding the long term business impact.
Fifo Capital has years of experience dealing with the opportunities and challenges that can cause cash flow problems. So when a business contacts Fifo Capital because they are looking for money, they can benefit from more than just the cash their business needs. Fifo Capital Business Partners combine their experience with their funding to provide long term solutions to cash flow issues.
Why call Fifo Capital?
Most businesses that approach an alternative finance lender like Fifo Capital are looking for funding because their traditional lender (such as the bank) is unable to help them. They are also likely to be dealing with a shortage of cash that requires immediate attention.
Finding the right product
The first step is to understand the current position of the business. Have they been to traditional financiers and failed to get funding, or are they still waiting for money to come through? What other finance agreements do they have in place?
It’s important to quickly explore exactly what the specific problem is that the business is facing: both in terms of the size of the funding requirement and what has caused the money to be needed. Once this has been established it’s possible to find the right product to deliver the necessary funds.
What is invoice finance?
The funding journey begins with Invoice Finance. The aim is always to provide a short term funding solution that will help a business to return to a long term traditional funding arrangement. For fast turnaround and simple security requirements, invoice finance is often the best solution.
Invoice finance allows a business to borrow money based on the value of an individual outstanding invoice. Security is based on the strength of the individual debtor (the customer who will pay the invoice). Where required a group of invoices can be financed in order to achieve a higher sum.
What are the benefits?
The business has control over the duration and size of the debt. The contract with Fifo Capital only lasts while the invoice has not been paid. This allows each agreement to be a one-off and protects existing finance arrangements from being impacted by any security agreements.
Businesses that benefit from invoice finance are looking for a fix to a short term cashflow problem. This problem could be caused by growth; a project or customer opportunity; an inward cashflow challenge; or a lack of margins. Invoice finance can help a business improve their cashflow position in all of these situations.
Why choose a short term business loan?
Invoice finance is not always the right solution for a business. If a company does not have available invoices, needs to borrow for the longer term, or does not want to disclose to customers that it is supplementing its cash position, it might consider a short term business loan.
Fifo Capital’s short term business loans are designed to work alongside any existing finance arrangements. In fact, Business Partners actively work to be as flexible as possible with asset security. Their ability to adapt to circumstances comes from years of helping clients who have struggled to secure funding with traditional lenders.
What are the benefits?
Scenarios where businesses may benefit from a short term business loan include: rapid growth or new opportunities – particularly with investment in infrastructure or large equipment; administrative costs; or general cash flow shortages that can be caused by unexpected circumstances or tight margins.
These scenarios may have led a business to discover it could not be funded by a traditional lender, but that doesn’t mean the opportunity should be ignored. Fifo Capital Business Partners are able to think around existing banking relationships to make a loan possible with alternative asset security. This is often agreed in partnership with the bank, as the success of the business is to the benefit of everyone involved.
The right solutions
Fifo Capital believes in providing solutions to cash flow problems, not just lending money. This requires an understanding of the underlying cause of the cashflow problem, as well as providing the funds needed to support the business. Our Business Partners have years of experience working closely with businesses to get to the heart of their issues.
Fifo Capital Business Partners take real pride in their ability to enhance relationships with the solutions they provide: working closely with banks, accountants, consultants, and other financial providers. Our solutions are long term because we work together to identify and share the improvements that could prevent cashflow issues recurring.
Invoice Finance, Cashflow Solutions and Business Loans
Fifo Capital are experts in cashflow solutions for small to medium business. Find out more about invoice finance and our fast business loans here: