Part of the flow of business is supply and demand, and this is ever important in manufacturing.
Manufacturers thrive on the demand for their products which may simply be a screw or a pin which makes up a bigger product, they may be the final finished product. Mainly manufacturers produce the parts and pieces that go towards creating a final product.
Across the globe thousands of manufacturer create products that are shipped to other companies and included on a production line. Think about the iPhone 4s. You have the screen, you have the casing, you have all the internal components, and the camera and so on, there are so many parts which could include over 100 different manufacturers.
Imagine this scenario. You’ve had an order for 10,000 pieces of product, which is one of the biggest orders you’ve had, its exciting times and this could lead onto a great relationship and more orders of this size. The only problem is that you need to be able to purchase materials, pay staff, pay for shipping fees and so on, and you can’t wait for the invoice to be paid by the client because that could be up to 90 days later. What do you do?
You speak to a Factoring Lender. Factoring and Invoice Discounting are finance solutions which are perfect for SME’s, especially manufacturers. You can gain up to 85% of the capital held in your invoices and you can have that cash generally within 24 hours.
You can then decide whether to hand all responsibility to the Factoring Lender who will then chase payments and get the rest of the money from clients, or you can carry on chasing your clients.
Once the payments have been paid you receive the rest of the funds from the invoices minus a small fee for using the factoring services. So you have cash quickly, business continues and you can look forward to more large orders from clients.