BCashflow Positive / Blog

How Invoice Financing is Saving Small Business From a Cashflow Crunch

Oct 07 2019
Avoid cashflow crunch, use invoice financing

The tightening of the lending criteria by banks is hurting small businesses looking to raise funds for meeting their cash flow needs.

A few years ago, profitable businesses operational for a period of time and with a good credit history found it quite easy to get approved by banks for a loan. This is no longer the case. Banks are making it harder, even for financially sound businesses to borrow money.

It’s not just hurting small businesses. According to the Australian Small Business and Family Enterprise Ombudsman Kate Carnell, the nation is in serious trouble if small businesses aren’t given help to grow in a flat economy.

Large businesses, on the other hand, continue to benefit. According to the RBA, lending to big business in the past five years has increased by a third, while bank lending to small business has been flat.

 In 2017, the Reserve Bank had clearly said it wasn’t the lack of entrepreneurial spirit which was responsible for the economy slowing down, but the absence of entrepreneurial finance which was holding back the small-business part of Australia’s economy.


Late Payments Adding to the Cash-Flow Crunch

 Compounding the difficulty to borrow funds when required, many small businesses are not getting paid on time. In turn, they aren’t able to pay their suppliers in a timely manner. This often results in supplies being cut off.

A research study carried out by Intuit across the globe found that 61% of small businesses are finding it difficult to manage their cash flow. The survey was carried out among 3,000 business owners from companies based in Australia, U.S., U.K., Canada, and India.

Despite their cash flow being choked, small businesses need to pay staff and their dues to the ATO. The Intuit study found that 32% of the businesses were unable to pay their vendors on time, while 43% had occasionally delayed payments to employees.

In comparison, large businesses have 60 and 90-day payment terms, as well as huge reserves of cash and,  are easily able to tide over a short-term cash crunch.

Invoice Financing – Banks are Not the Answer

Small businesses who approach banks complain that banks will lend them money when it’s not needed and ask them to return it when cash reserves are depleted.

With problems such as cash flow and late payments, small businesses are looking for alternative financing solutions to fund their operations and growth.

Among these are invoice financing offered by companies such as BCashflow Positive.  Essentially, invoice financing works by unlocking the cash tied up in invoices, thereby speeding up cash flow.

With the growing popularity of invoice financing, small businesses are able to take advantage of competitive rates compared to what’s offered by banks.


Working With BCashflow Positive – A Win-Win Solution

Partnering with a reputable and established invoice financier like BCashflow Positive is a positive step for SME’S.  BCashflow Positive takes care to maintain a client/debtor relationship. We work closely with our clients to fully understand their business and customer needs before providing an invoice financing solution.

If you’re looking to have fast access to cash locked up in your invoices, we can get you up to 90% of your invoice value as quickly as 4 hours and the remaining 10% as soon as your customers make payment to us.  Call us on 1300 937 292 for more details or CLICK HERE to get a quote.



What Our Clients Say

"We used BCashflow Positive when our bankers didn't want to know us, as we operate in an industry that was going to be affected by the introduction of the carbon tax.Traditional lenders were unable to deal with the uncertainty and risks.
BCashflow Positive understood the risk and assisted us with our cash flow, which was great"

Financial Controller, Solar Manufacturing Company, WA

"Getting instant funds from our invoices is crucial to our business success. It means we can pay wages on time and grow our business. The staff are also great to deal with."

Owner, Recruitment, NSW

"We engaged BCashflow Positive to get on top of our ATO obligations. Constant cash flow allows us to meet our operating expenses and grow our business."

Accountant, Earthmoving, QLD

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