Why Does A Financier Care What My Profit Margin Is? What Is A Good Profit Margin?

 In Debtor Finance, Invoice Factoring, Invoice Finance, Purchase Order Finance, Trade & Inventory Finance

When applying for a facility, you will be asked what your profit margin is. Why does that matter?

Some clients are a little bit sensitive about disclosing how much money they make out of a product or service.

They may think we will take advantage of them if we thought they were very profitable.

Perhaps they think that they make so much money that the financier may drop everything and do what they do (profits are made from excellent execution, not ideas).

The reality is that the more profit a client makes, the more warm and fuzzy a feeling a financier gets.

The reason being that, a financier’s well being is tied to the client’s success. If the client is raking in the cash, then the financier will see this client as a low risk.

I know I sleep better at night knowing that my client is making lots of money and won’t be out of business anytime soon.

I want my clients to be growing with us and not going out of business.

So it’s important you at least start with a decent profit margin.

A profit margin of 30% is a starting point in Purchase Order Finance.

For more information please call the office on 1300 651 243 to book an appointment with a Product Specialist.


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