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• 27 Apr

  Case Study About Financing Rapid Growth

  

  Financing rapid growth has been a common requirement we have seen among the companies that have contacted us recently. As the economy has recovered following the pandemic, many businesses have seen sales increasing and they have taken the opportunity to expand their businesses.

  Financing Rapid Growth

  One of the issues with funding growth is that as the company's turnover increases, so does its requirement for working capital. Many traditional forms of borrowing don't accommodate this. For instance, a business loan is for a fixed amount and an overdraft has a set limit. Yes, it may be able to be increased, but that requires renegotiation.

  Finance That Grows With Your Company

  Receivables finance is a form of business financing that does increase as your turnover grows. The funding level is based on a percentage of your sales ledger. As you expand you raise more invoices and your sales ledger increases. When this happens the funding based on the value of those accounts receivable also increases. In fact, there is a direct link between increasing turnover and releasing more funding.

  Case Study

  We helped a customer recently who was in this position. They were a recruitment company working in the civil engineering sector. The company had already achieved a multi-million-pound turnover, but with the right funding, they expected to double their annual sales in the next 18 months.

  CHOCs Facility

  We found them a CHOCs facility with an independent invoice finance company. CHOCs stands for "Customer Handles Own Collections". This will release the finance our client needs but allow them to retain the task of collecting their own invoices. This means they retain full control over debtor contact, which can be important to some companies.

  With the new funding line in place, they are set to be able to finance their rapid expansion with the peace of mind that comes from knowing that their funding will grow with their business.

  By Glenn Blackman