Manufacturing & Alternative Lending: Using Corporate Finance To Make Your Business More Competitive

Blog

By Bibby Financial Services

18 Jul 2018

Alternative Lending Offers Manufacturers Flexible Corporate Finance Options 


Many manufacturers worry about cash flow bottlenecks. Long payment terms on invoices and the high cost of carrying inventory of materials and finished product often mean capital is locked up and not available when the business needs it. When suppliers offer special purchasing opportunities or when new equipment is needed, manufacturers without liquidity can find themselves in a bind to prioritize where to focus next. Alternative lending is the corporate finance solution for manufacturers who need to ensure they have the cash flow when they need it. It’s a solution that may not be as common as traditional bank loans but can offer business owners and financial officers newfound flexibility and access to capital that keeps a business competitive in its market. 

Corporate Finance for a Competitive Advantage


Corporate finance products like Asset Based Lending (ABL), Factoring and Invoice Discounting (ID) are alternative lending solutions known in some industries, but many businesses, including manufacturing, are just learning about the benefits. Using a funding partner for factoring invoices allows you to leverage cash flow locked in the Accounts Receivable row of your balance sheet. You receive the majority of the value of the invoice right away and your funding partner handles the collection of payments, meaning you get the balance minus fees when payment is made. Asset Based Lending is effectively a revolving line of credit that uses assets like inventory, equipment or real estate as collateral. Invoice Discounting is another funding option that allows you to obtain an immediate cash injection with self-managed credit control. This is a fast, flexible source of funding which allows for confidentiality. 

Partner With a Funding Partner to Win


Manufacturers that partner with a funding provider for alternative lending services have a distinct advantage over those who don’t. Leveraging a smart corporate finance strategy allows for flexibility  advantage of purchasing opportunities, hiring staff on short notice or upgrading and replacing equipment as needed or for demand. Effectively managing cash flow isn’t just good for your business, it is a competitive advantage that will make your operations more agile and set you apart from other companies.

ABL, factoring and ID services providers should have a thorough understanding of your business and your needs. Bibby Financial Services (BFS) is an alternative lending provider that prides ourselves in maintaining a close working relationship and providing access to a highly experienced and collaborative team that understands your business. Corporate finance products from BFS are not ‘one size fits all’ - we know effective funding should be custom tailored to your business needs. Contact us today to get a quote or to learn more, review the manufacturing funding page on our website.

 


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