invoice finance covers cashflow gap for a single-customer ledger

The gap between issuing an invoice and being paid can be up to 60 days but staff must be paid in the meantime. Invoice finance solves this problem.

The client

Vegetation management is an essential part of the construction and infrastructure process, and it also helps protect people from the risk of fallen trees and branches.

This client is in this business and is kept very busy sending teams of arborists and other vegetation specialists up and down the east coast of Australia.

This is a thriving organisation, but it has cashflow issues because of its business model

the challenge: obtaining invoice finance with single-source income

The business in question follows a labour-hire model. Because of the short-term nature of each job, contractors expect to be paid promptly.

However, being paid by major infrastructure companies can take up to 60 days. This leaves a large gap between paying staff and finalising an invoice. Invoice finance is the obvious solution but there were a couple of problems at play for this business.

Firstly, while successful, the company generates most of its work from one client; sometimes in the vicinity of 90 per cent. Some lenders are reluctant to offer invoice finance solutions when the risk is not spread across invoices. The client knew they needed an arrangement that would accommodate their small customer base.

The owner is also running a busy small business and doesn’t have a great deal of time to spend submitting invoices and uploading ledgers. He was looking for a low-touch, high-tech solution.

The final problem was that the company had recently restructured. This created some difficulties in accessing invoice finance solutions from larger lenders.

the solution: Only pay for what you use 

The broker who introduced this client to Aris from our Business Development Team has first-hand experience in the lending industry and knew thornmoney would find a way to make things work.

He recommended us because we have a high-tech system that connects with Xero and saves the business owner from having to deal with paperwork once a solution is in place.

When it comes to the concentration limit, we do encourage clients to have as many customers as possible. However, in this case, we were able to accommodate the client’s request for invoice finance.

One of the benefits of working with thornmoney is the ability to look at individual circumstances and create a flexible solution. This business now has access to 60 per cent invoice finance and is able to leverage it to reduce cashflow shortfalls. 

Looking for an invoice solution that suits your company? Contact Aris today!

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