When it comes to staying on an even financial keel, having sufficient working capital is essential. But what exactly is working capital, and why is it so vital?
Essentially, working capital is the difference between your current assets, such as cash and accounts payable, and your current liabilities, like accounts payable and any debts due within a year.
The larger your company’s working capital, the healthier your levels of liquidity, and the better you are positioned to weather slow periods.
So what should you do when times are tough?
- There are several working capital and cash flow finance tools now available to help your business in lean periods. Debtor finance is growing in popularity, and involves the selling of a business’ accounts receivable in exchange for a cash advance. There are several key benefits to debtor finance:
- As your business grows, the facility grows with it.
- There is generally no need for real estate security.
- It is a standalone facility that can sit alongside other business borrowings.
- It helps you grow your business and increase purchasing power through improved cash flow.
- There are no capital repayment requirements.
- It helps strengthen supplier relationships through prompt payment.
Want to learn more?
For more financial tips, download our whitepaper: Surviving Cash Flow Challenges. Creating cash flow: your guide to navigating today’s common cash flow challenges through the learnings of Australia’s fast growing SMEs.
Whether you are looking to expand, boost working capital, improve your day to day cash flow, Scottish Pacific has a range of debtor finance and trade facilities can help you.
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WHO ARE SCOTTISH PACIFIC?
About Scottish Pacific
Established in 1988, Scottish Pacific Business Finance is Australia and New Zealand’s largest specialist provider of working capital solutions with a comprehensive range of invoice finance and trade finance facilities.
Access to experienced decision makers
Our executive management team has more than 100 years of small business finance experience, and we have fully-operational offices in Sydney, Melbourne, Brisbane, Perth and Auckland with each headed up by a local General Manager. Our clients and introducers enjoy a level of access to decision makers that is unmatched in the industry.
Endorsed by recommendation
More than 80% of all our new clients are referred to us by accountants, banks, commercial finance brokers and other business advisers. We have hundreds of such sponsors willing to recommend our services; a clear sign that we are the best in the industry.