Finance needed

[wheeler-dealer]

Hi, a little advice please would be appreciated.
We have been running our business for a few years now with our own working capital, all good so far. We have now started to take on work from a few big companies who’s credit terms are net 30 days. It is really helping us grow our business to a another level but I can foresee us running out of money in the future. What is the best way to raise capital to keep growing. Is invoice factoring still a good way to help with this.

 

[simon field]

@Ian J is your man here.

 

[MBE2017]

Be prepared to set a criteria re extending credit and stick too it, no matter what the name or how big they are.

There will be plenty of smaller companies killed by poor cash flow over the next year or two, everyone has to decide what risk level they are comfortable with.

I have always been ultra cautious and whilst it has made trading with a small handful harder, they, like all the other clients started on six months proforma terms cash with order, all bar two stayed that way. It helps in not losing money though.

 

[Truemanbrown]

If you go the invoice factoring route, be very careful. Especially, keep an eye on the minimum factoring charges.

 

[Ian J]

What is the best way to raise capital to keep growing. Is invoice factoring still a good way to help with this.

Why not give me a buzz to discuss if it's suitable for you or not. Details in signature

 

[BubbaWY]

We have now started to take on work from a few big companies who’s credit terms are net 30 days.

One word of warning. Whilst these bigger companies may state 30 days be prepared for them not to stick to it. Ive found that the bigger the company, the more likely they are to push these terms.

I used to deal with a large manufacturing company whose payment terms were 30 days. They were cash rich, and most of their work was for the Ministry of Defence. It would often be 90+ days before they would pay.

 

[Mark T Jones]

First, I'd definitely chat with @Ian J .

However, even if you go the factoring route it would benefit you to get a knowledge of credit control - a process that starts before you offer credit, not when payment is late

As has been pointed out, 30 days seldom means 30 days - and sometimes means not at all.

 

[simon field]

Agree with the above.

30 days often translates to ‘30 days from end of month of invoice, plus a week or two’

 

[Ian J]

Why not give me a buzz to discuss if it's suitable for you or not. Details in signature

No call received. Never mind