Metal fabrication is a growing and changing business. The environment can be challenging. Growing metal manufacturers often struggle to get control of their cashflow. Without control over this, it can be challenging to keep up with the continually changing demands of the industry.
Why Metal Fabrication Funding Is Shifting
Metal fabricators are stuck in the tug between their suppliers and clients. Keeping your cash flowing is essential, but so are the relationships with your suppliers and clients. You need to make sure that you pay your suppliers on time, but this can be hard if your clients aren’t paying you in a timely manner.
Traditional loans can be used to bridge the gap, but this is an expensive option. The other issue with using loans to support your cashflow is that it is not a quick process. Improving cashflow for the metal industry requires the use of some alternative finance options.
For growing metal manufacturers, there is a need to move away from traditional banks and use the services of newer financial providers.
Best Finance Solutions For Metal Manufacturers
Supplier Finance – Supplier finance allows you to make sure that your suppliers get paid on time, even if your clients haven’t paid you yet. You work with a finance company who will cover the cost of your supplier’s bills and then take a small fee once you have been paid. This requires you to complete both your billing and payments through their systems.
Consequently, this means that there is a small barrier to entry. But, with any new system, you will have to make changes. This allows you to ensure that you pay your suppliers on time, which will keep them doing business with you. You can get bills paid when you need to, in a quick and easy process.
Flexible Discount Invoicing – With flexible invoice discounting, you are able to essentially access your invoiced funds before your clients pay you. Typically you can get the majority of the funds from the finance company as soon as you issue the invoice. Once the client pays, the rest is released to you for a small fee. This provides flexibility and lets you keep your money moving as you need it. It removes the need to pressure your clients to pay in shorter time frames than they are happy with.
Stock Finance – In a market where prices can fluctuate, especially with the current political climate, it can be a good idea to stock up on your supplies when prices are low. Stock financing gives you the funds to do this. You get the money to buy specific stock. Once you are ready to use it or sell it, that is when you repay the money you have borrowed. This gives you the flexibility to get what you need when the price is right without needing to worry about a fixed repayment date.
Unsecured Business Loans – You can get relatively small business loans that can be great for SMEs. All you need is a good credit history. These can be a good way to get financing for specific costs, for instance, training or new equipment. They are a little more time demanding, so they are not as good for unexpected expenses or quick decisions.
If you want to discuss the finance options available to your business and find the right one that will work for you, get in touch with GapCap today for free, no-obligation expert advice.