Go with the flow

How Cashflow Finance can help grow your business

Brendan Green, Head of Cashflow Finance, St George Bank, explains how more manufacturers are taking advantage of Cashflow Finance options to expand their business.

Cashflow Finance provides working capital for your business and makes seasonal highs and lows much easier to manage.

It gives business the ability to stand on its own feet.

With Cashflow Finance you can borrow against the money tied up in your outstanding invoices without the need for bricks and mortar security.

It gives you the power to control your working capital so you no longer have to ride the peaks and troughs of irregular cash flow.

It’s an outstanding way to fund business growth, develop new products or services, make acquisitions or complete business succession plans.

This facility usually allows you to draw down funding within 24 hours of an invoice being approved, instead of waiting weeks or months for your customers to settle their account.

In most cases, borrowing limits are determined by your accounts receivable.

Manufacturers can also borrow against stock, plant and equipment – again without bricks and mortar security.

This means you can separate your personal assets from the business.

Previously, many business principals mortgaged personal properties as security for business funds.

Funds from Cashflow Finance are generated through the current assets of your business. They can be used to refinance existing business borrowings that may be secured by your personal property.

Your real estate assets are then free and could, for example, be geared towards your personal investment strategies.

With Cashflow Finance you have the power to control your working capital.

It’s an outstanding way to fund business growth, develop new products or services, make acquisitions or complete business succession plans.

Cashflow Finance can be increased as business revenue increases.

In other words, as the business grows, so will the level of available funding.

The amount you borrow is determined by your business assets – rather than the value of your property security.

Cashflow Finance has become a popular option with many Australian businesses.

Latest figures show turnover for Cashflow Finance has increased nearly six fold in the past decade ($10.9bn to $60bn).

St George Bank provides two main types of Cashflow Finance: Invoice Discounting and Invoice Discounting Plus.

Invoice Discounting
This is for businesses wanting to access the money tied up in their invoices, but who want to collect their invoice payments and manage and maintain their own debtors ledger.

Invoice Discounting Plus
This allows a business the capacity to borrow against approved Stock and Plant and Equipment, in addition to accessing the money tied up in their outstanding invoices.

Cashflow Finance can free up the funds locked in your sales ledger.

More businesses are turning to Cashflow Finance to buy major assets or for a business purchase.

Cashflow Finance is ideal for “Big Bang” events that require significant capital.

This may include:

  • Acquisition of a business competitor
  • Management buyouts (an opportunity for one partner to buy out another)
  • The launch of a new product
  • Offering customers open account terms (a one-stop shop)

Cashflow Finance can also give peace of mind while juggling tax (GST) and superannuation payments with other commitments. This often relieves the pain for many businesses.

Cashflow Finance is suitable for most businesses that provide their products or services to other businesses on credit terms.

It is ideal for most manufacturing businesses including:

  • Food and beverage
  • Paper and printing
  • Electronics and electrical goods
  • Computers and software
  • Chemicals and plastics
  • Clothing and textiles
  • Heavy machinery
  • Light engineering
  • Machine Tools
  • Materials Handling
  • Metal Working
  • Plant and machinery
  • Rubber, plastics
  • Transport
  • Wholesale steel stockholding

St George has a team of Cashflow Finance specialists who work one-on-one with clients to deliver the best solution.

Please note: Terms and conditions apply on all facilities as do fees and charges. They tend to vary according to the risk profile of the facility.

St George Bank
Ph: 02 9236 2219