Alternative liquidation strategies are part of what makes your business more financeable
Have you considered how your purchase orders and invoices measure up?
If so, how can you ensure that your business is more attractive to the regular financier? Luckily, there are ways to be more financeable. In this video Daniel explores five factors that will make your purchase orders and invoices easy to sell, focussing on sell through guarantees, paperwork, delivery dates and liquidation strategies.
Learn more in the video about how to get those financiers to buy your POs & Invoices.
The first thing is and the number one thing is sale and return, consignments, and sell-through guarantees. Try to make sure that your supply agreements don’t have these in them. And if you are going to offer a sell-through guarantee, often these are agreed upon after the terms are signed, make sure you tell and disclose to your financier that this agreement is in place. If he finds about this down the track, he’s not going to be too happy.
Number two, paperwork. Make sure, obviously, that you have purchase orders for the goods that you’re delivering. Make sure you’ve got invoices, and more importantly than that, make sure you’ve got evidence that the goods are being delivered. And try to make sure that you know exactly who you’re invoicing and make sure you’re invoicing the correct entity.
Number three, delivery dates. If you’re doing purchase order finance and say you’re in the fashion market, make sure that you’ve given your manufacturer enough time to be able to produce the goods, and make sure that they’re delivered and distributed to your customers to meet that delivery date. You want to make sure that if you’re in breach of that delivery date, that the customer . . . well you don’t want to put yourself in a position where you’re in breach of that delivery date and the customer won’t take that stock.
Number four: When you’re doing debtor finance or invoice finance, you want to make sure that before you finance an invoice that the customer is in receipt of those goods and that they’re going to accept that invoice. That’s going to make it really attractive to a debtor financier or an old-school factor.
Number five: Often purchase orders get cancelled. Often stock gets accepted. You finance an invoice. The customer takes the goods, and then they want to return them. Make sure that it’s important that you can demonstrate to your financier that you have an alternative liquidation strategy. What I mean by that is you’ve got another way to sell those goods if the stock is, in fact, at the end of the day returned.
If you’d like to know more about debtor finance or invoice finance or purchase order finance or whatever you want to call it, give us a call on the 1300 number. I’m Daniel. Thanks for watching.