Manufacturing Industry - tailored funding solutions for your industry
The manufacturing industry has certainly been hit hard in recent times, and with traditional banking such as overdrafts and loan being more restrictive and harder to obtain, it is only the most successful manufacturers who have been able thrive.
The key to being a successful UK manufacturer is to understand how to best fund your business operations and investments to allow a healthy, flexible cashflow.
Manufacturing Industry Finance Options
It is likely you already have the ability to secure an invoice finance deal which will be able to fund every aspect of your business.
In particular for the manufacturing industry, you are often required to allow customers time to settle their debts with you after you have supplied the goods, perhaps up to 30, 60 or even 120 days in some of the more extreme cases. Invoice finance allows the release of up 90% of the value of these invoices so you can use the cash instantly to cover costs such as paying suppliers, rent, payroll and machinery repair.
The use of the cash advance is up to you, with many manufacturing companies using their newly found cashflow solution to purchase new machinery which allows them to increase productivity and grow.
A few more details on Manufacturing Finance
This form of manufacturing finance is also known as manufacturing factoring. The factoring lender will be able to advance you the percentage value of your invoice whilst also taking on responsibility for management and collection of debts owed to you. This saves your time and admin costs as you are effectively outsourcing your credit control facility.
Manufacturing factoring can also come in the form of invoice discounting which is typically taken up by larger turnover companies. Invoice discounting for manufacturing companies is a confidential facility which means your customers need never know you are using it.
The Benefits of Invoice Finance for Manufacturers
There are many advantages of choosing either manufacturing factoring or manufacturing invoice discounting as your cashflow funding solution:
- You now have the financial capacity to afford the costs of those larger jobs which you may have historically had to turn down. The percentage based advance rate means you receive up to 90% of a small job just as you will receive up to 90% of a large job.
- You have funding to pay off suppliers, pay wages and afford other costs of a job.
- Invoice finance provides up to four times the amount of cash to use today than most traditional bank loans or overdrafts provide.
- You can also use the cash to invest in new machinery and equipment to help grow your manufacturing business. NOTE – if at the moment you only require funding for a particular asset, our asset finance advice may be the best funding solution.
- Invoice finance allows you to purchase larger volumes from suppliers which can lead to a better relationship and bulk buy discounts.
- Flexible finance for seasonal trends or even unforeseen peaks in demand as the percentage value used is kept constant no matter what the size of the invoice.
- There is no need to be a property owner or secure the cash advance against valuable assets unlike most bank loans and overdrafts as invoice finance is secured on the knowledge of future payment from your customers.
If you would like to learn more about factoring, invoice discounting and sport factoring, please follow this link to our short quote form which will enable us to be prepared for when we call you for a free, no obligation chat about your options. We look forward to hearing from you.
Every month Touch Financial help businesses improve their cash flow with invoice finance. Request a quote to find out how much extra cash you could raise.
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