The manufacturing sector – like most industries – has suffered in the economic downturn of recent years and for that reason, traditional avenues of finance have been blocked. Loans and overdrafts have been harder to obtain and many manufacturers have either gone out of business or diced with insolvency due to the tough financial climate. As a result, it has never been more crucial for lenders to show confidence in the sector and provide finance once again to allow manufacturers the chance to thrive.
Real Business Rescue work with numerous banks, brokers and finance firms having established key relationships with over 50 lenders in total – some of which specialise in providing funding options for manufacturing firms. If you’re in this industry and require an injection of capital, we can help.
Maintaining a healthy cash flow is often the lifeblood of a business and in the manufacturing sector, this can be particularly tricky where customers traditionally have 30, 60 or even 90 days’ credit periods in which to pay their suppliers.
For this reason, a common finance solution throughout the sector is invoice factoring which enables you to release funds from unpaid invoices rather than waiting for the money to come in. In short, a lender will pay your invoices (typically around 90% of the balance) to provide your company with the cash flow it needs, before chasing up the payment with the customer themselves so you don’t have to. It’s a particularly safe and secure source of finance because the business has already been done; unlike with other more speculative types of finance where there is no guarantee that money borrowed will definitely be coming back into the company.
There are other common finance solutions for manufacturing firms but it would depend on your individual circumstances. Our specialist finance team can help you understand which funding options are best for you and source the most competitive rates and deals on the UK market. Our extensive office network comprises 72 offices across the UK with a partner-led service offering immediate director advice.
Author: Keith Tully (Partner)
21st February 2019
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