Helping your clients to exploit growth opportunities

June 17th, 2022

Here are five tips for identifying finance opportunities among your clients.

Tip 1: Focus on specific industries

Not all businesses are suitable for an invoice finance solution. It is tailored for SMEs that sell goods or services to other businesses or government agencies on standard trade credit terms. 

This is by no means an exhaustive list, but you should check your client base for businesses operating in these industries:

  • Transport and logistics.
  • Manufacturing.
  • Labour hire.
  • Wholesaling.
  • Building materials supply.
  • Food and beverage supply.
  • Printing, media and telecommunications.
  • Information technology products and services.
  • Import and export.
  • Agribusiness.

Tip 2: Check your clients’ debtor books

Every debtor book is set up differently, but most businesses will have invoice categories showing 30 days, 60 days, 90 days and so on. Clients with a significant proportion of their outstanding invoices in the 30 or 60 days columns are likely to be good candidates for invoice finance.

This is an indication the client’s business is healthy, but that they are still waiting on much-needed cash. Invoice Finance can help them access up to 80 per cent of the value of their unpaid invoices while they await payments to trickle through.

Tip 3: Find growth-oriented businesses

Businesses need capital to expand, whether it’s setting up a new office, purchasing better equipment or simply investing in the stock and labour needed to take on more orders. Often, restricted access to capital means clients’ customers go elsewhere to fulfil their procurement needs. Gaps in your clients’ service or product range risks competitors attacking their customer base, as well as their customer expectations and requirements being unfulfilled.

Some SMEs may face difficulties accessing finance from their existing lenders, particularly if they’ve already maxed out their overdraft and other lines of credit, or if they have ATO debt. You should see this as an opportunity to support growing business owners who have profitable operations but who need a helping hand to fulfil their potential.

Tip 4: Find SMEs with cash flow concerns

Do your clients often have short-term cash needs? Invoice finance is a valuable tool for helping SMEs overcome the cash flow gap between getting paid and meeting their payment obligations. It can support businesses during difficult trading conditions.

Tip 5: Talk to business owners with personal assets at risk

Many small business owners finance their organisation through secured bank loans, with the majority putting their family home up as collateral. Risking personal assets places an incredible burden on many budding entrepreneurs, but this is usually unavoidable when getting an SME up and running.

Once a business can stand on its own two feet, most owners will be keen to restructure their debt obligations to free up the family home and any other assets trapped as security. This ensures that their assets can be more readily available for estate planning.

An invoice finance facility can help SME owners to divest their personal property from their businesses, while also providing an injection of capital for growth or cash flow assistance.

If you'd like to learn how Earlypay's Invoice Finance & Equipment Finance can help you boost your working capital to fund growth or keep on top of day-to-day operations of your business, contact Earlypay's helpful team today on 1300 760 205, visit our sign-up form or contact [email protected].