We recently spoke to Sam Tran, GetCapital Credit Analyst, to find out more about a recent $160,000 facility to a fitness franchise who were looking to purchase a range of tertiary assets and equipment.
Q. Sam, can you tell us a bit more about the business?
A. The business consists of seven fitness clubs located within New South Wales, each trading under a unique company name.
Q. What do you look for when assessing a request?
A. There are a few factors we look for, including how long the business has been trading, the quality of the credit file(s) and the overall cash flow position of the business based on a review of their average sales and running balance.
We also look at the director profiles to determine if they are also property owners. Ultimately, these factors enable the GetCapital Credit Team to determine whether the business profile aligns with their request.
In this case, the request was very detailed – the broker provided clear notes regarding business operations, advised precisely what equipment the client was after and understood the pricing/term for the equipment.
Q. You mentioned this was a strong application, can you tell us what stood out for you?
A. This entity has been trading for over eight years with the support of two directors with a clear credit history, has asset backing with a total of three properties between the directors and a strong cash position on their balance across the last six months sitting at $122,000.
Q. How long did it take you to approve the full-requested amount of $160,000?
A. Based on the information we received from the broker; we were able to approve the full-requested amount of $160,000 within 30 minutes – a great outcome for all involved.
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Technology innovation has and always will be key to business success. For many businesses, COVID-19 has acted as an innovation catalyst bringing forward the digitisation of services. The financial services sector is no exception.
Continuing GetCapital’s SME Insights Series, we’re excited to share with you our second installment, ‘Bank statements: The technology, the benefits and the future’ with Jamie Osborn (CEO, GetCapital), Simon Bligh (CEO, illion) and Andrew Dodwell (Director, Magnolia Lane Financial Services).
Our panel of experts discussed how bank statement technology is being used to verify key customer information, in order to streamline the entire credit assessment process.
We recently spoke to Sam Tran, GetCapital Credit Analyst, to find out more about a recent $160,000 facility to a fitness franchise who were looking to purchase a range of tertiary assets and equipment.
Q. Sam, can you tell us a bit more about the business?
A. The business consists of seven fitness clubs located within New South Wales, each trading under a unique company name.
Q. What do you look for when assessing a request?
A. There are a few factors we look for, including how long the business has been trading, the quality of the credit file(s) and the overall cash flow position of the business based on a review of their average sales and running balance.
We also look at the director profiles to determine if they are also property owners. Ultimately, these factors enable the GetCapital Credit Team to determine whether the business profile aligns with their request.
In this case, the request was very detailed – the broker provided clear notes regarding business operations, advised precisely what equipment the client was after and understood the pricing/term for the equipment.
Q. You mentioned this was a strong application, can you tell us what stood out for you?
A. This entity has been trading for over eight years with the support of two directors with a clear credit history, has asset backing with a total of three properties between the directors and a strong cash position on their balance across the last six months sitting at $122,000.
Q. How long did it take you to approve the full-requested amount of $160,000?
A. Based on the information we received from the broker; we were able to approve the full-requested amount of $160,000 within 30 minutes – a great outcome for all involved.
We recently provided a business in the fitness apparel industry with a $400,000 term loan facility to help them invest further in their online marketing – a strategy that has helped the business grow their sales at an aggressive rate year-on-year.
Our Senior Credit Analyst, Tony Dinh, discusses the criteria we used to approve the customer’s full requested amount within an impressive 48 hours, and shares a few key highlights of the application.
We are excited to have partnered with The Adviser as Platinum sponsor for the 2020 SME Broker Bootcamp. Watch a replay of Cristian Fedrigo, Head of Strategic Partnerships at GetCapital, and Stuart Donaldson, Founder of Banyan Co as they discuss the topic of “Helping brokers capitalise on the latest changes in SME trends”.
We recently provided a business in the media industry with a $150,000 Business Overdraft to support cash flow for their upcoming pipeline of work.
Our Credit Analyst, Krystal, discusses the highlights of the deal and the criteria we used to approve the customer’s full requested amount.
We are excited to have kicked off the GetCapital SME Insights Series with our first panel session – ‘The road beyond 2021’ with David Gandolfo (Director at Quantum Business & President of CAFBA), Ian Hyman (CEO of Hymans) and Jamie Osborn (CEO of GetCapital).
They covered a number of important SME topics, including how businesses are navigating the cash flow challenge, perspectives on rising insolvencies, and what the focus will be for 2021.
Jump to the time stamps below:
We welcome George Dib, Managing Director, from Amfin Finance for a broker Q&A with George Steele, our NSW Business Development Manager. This COVID-friendly couch session covers how George has been managing through 2020 and how the GetCapital Business Overdraft has worked as a cashflow solution.
Jump to the time stamps below:
One of the main challenges for many small businesses – especially among those in the early phase of their growth – is cash flow management.
When cash outgoings exceed cash income, that can mean potential cash flow problems down the track, by anybody’s accounting. But what if the books show increased sales and everything points to impressive business growth, and there are still insufficient funds? What’s happening? Chances are the company is facing ‘the gap’ – the receivables gap.
To attract and keep customers, a business might offer generous payment terms, extending the collection period and essentially providing goods or services on credit. It’s a strategy that has its benefits, and can boost overall revenue. But when businesses allow 30, 60 or even 90 days before the full amount is due, the gap between the delivery of goods or services and payment on the invoices starts to open up.
And what about accounts that are aren’t paid until well past the invoice date? The pile of ‘accounts receivable’ mounts higher every day, and there’s still no cash in sight.
This is the receivables gap. Add payment-processing time and the gap widens even further.
For some businesses, slow payment might be a constant concern throughout the year, or some months could be particularly problematic. Either way, the question of cash flow becomes crucial.
A widening receivables gap can present some inherent dangers to the growth of a small business.
The provision of goods and services involves expenses. Without sufficient and readily available funds, a business might be reluctant to maintain a stock of the raw materials and products it needs to service customers. As a result, the business isn’t well positioned to take advantage of potential new opportunities and seize every chance to achieve more sales.
It’s the domino effect. If a business doesn’t receive payment from customers it will struggle to pay its suppliers. This can ultimately damage the relationship, and delay subsequent orders, further risking a loss of business.
Uncertain or irregular cash income reduces confidence in terms of expansion or diversification – particularly if the business isn’t monitoring its collection periods to detect seasonal patterns.
Businesses may try to bridge the gap in different ways.
Some use late payment penalties, but these don’t generally promote better business relationships. Online payment options might keep customers happy and shorten the payment cycle. It’s also possible to shorten the collection period but, to remain competitive, many SMEs need to continue offering flexible credit terms to their customers.
There are better ways.
Business operators can look after their customers and also take care of their own business. They know it’s wise to ‘mind the gap’ and they use cash flow or trade credit finance to do it.
Approximately 74% of Australian SMEs rely on some form of external finance, and an increasing number are willing to approach non-traditional lenders for business finance options.
There are clear advantages:
GetCapital has developed a trade finance alternative called Shift Payments precisely to solve this problem. With Shift, you get paid on time, every time, and your customers get better, more flexible trade terms. It’s a win-win for both.
GetCapital also offers a broad range of additional business finance solutions up to $750,000, like Business Overdrafts, Working Capital facilities and Term Loans.
Business doesn’t have to slow down when customer payments do. Minding the gap with a business loan can guarantee a steady cash flow when it’s needed most.
