In 2008, a small importer of specialty ingredients required funding to overcome a serious cash flow shortage. The company provides specialty ingredients for food manufacturers, particularly baking.
They had sourced a number of new products from Asia and were forced to commit to substantial minimum orders. While they knew that the products would be sold eventually, they had rented storage facilities and had to carry a larger than expected inventory. In addition, average collections were drifting out to around 50 days.
Due to a lack of security their bank would not provide funding so they ended up choosing another invoice discounting company. However, they began to realise that this facility simply did not suit their needs.
According to the director. ”We were forced to use the facility for every single invoice we raised. We had three or four customers who would pay promptly in 14 days, so we were wasting money putting them through invoice discounting. We sat down and explained the situation to them but they were so inflexible and they also reminded us that we were still subject to a 12 month contract.” he said.
“In addition, we were really unhappy with the level of service provided by the finance provider. As we approached the end of the contract, I made it my priority to look for an alternative invoice discounting provider. We investigated two other companies and eventually chose Cash Resources Australia,” he said.
“We have been delighted with the outcome. The standard of service that we received far exceeded our expectations. Most importantly, the flexibility of the facility really suits our needs. They are much more proactive and take a keen interest on how we are going.” The director said.