How SMEs Can Borrow Against Inventory
It doesn’t look like banks are going to loosen their lending criteria to SMEs anytime soon. If anything, borrowing against fixed assets to raise cashflow for your business is probably going to get even tougher over the next 18 months.
The other night’s Leaders debate didn’t really throw any new light on the subject either. Tony briefly talked about tax cuts, but for the most part the rhetoric was focused on immigration, green house gases and paid maternity leave.
Hopefully inventory finance may help the worm turn for quite a few small businesses in Australia. It certainly has amongst wholesalers and retailers in Europe and the US.
Like many great new ideas or products, the whole concept of inventory finance is so obvious that you’d swear you’ve come across it before. But you haven’t, at least not in Australia. One of it’s main attractions is that you don’t have to be cashed-up, or have solid fixed-assets use it. Hell, you don’t even need a Purchase Order!
This is because your inventory can be deemed as an asset. Which means if supplier calls you to say that they have a great deal on some materials or products which you know you can sell (maybe not even now, but at some point down the track) you can say: “YES!”
This is because if you are buying stock or holding stock that is deemed to have resale value, you may qualify for funding. (Please don’t ask for funding if you want to import “Julia for PM” tee shirts, I really don’t think they’ll be worth much in a couple of months, irrespective of who wins the election.)
It can also work the other way round. Let’s say you receive an order from a reliable customer. They want the goods yesterday. You jump on the phone to your supplier, but they want payment before delivery. To add to the problem, you want the goods shipped to your warehouse, because you want to pick and pack, add a part on, control distribution…HELP!
Well, we can! AR Trade Finance can fund your transactions from the initial order through to final delivery (even allowing for a stop-over in your warehouse or factory).
We’re not geniuses. We’ve just taken a proven product and introduced to Australia. So, if you have any clients that are importers, wholesalers or retailers that would like to increase business beyond their normal scope or volume, get on the blower to us.