Working Capital & Cashflow Solutions

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Working Capital & Cashflow Solutions - FAQs

  • Working capital is the difference between current assets and current liabilities. It's essential because it helps maintain smooth operations and meet short-term obligations.

  • Common solutions include business lines of credit, invoice financing, merchant cash advances, term loans, and trade credit.

  • Criteria typically include a minimum time in business, annual revenue requirements, a good credit score, and a solid business plan.

  • Secured loans require collateral, such as property or equipment, while unsecured loans do not but may have higher interest rates due to the increased risk for lenders.

  • Invoice financing involves selling your outstanding invoices to a lender at a discount in exchange for immediate cash. You receive funds upfront, and the lender collects payment from your customers.

  • Yes, working capital loans are typically flexible and can be used for various expenses, such as payroll, inventory, equipment, and marketing.

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Working Capital Finance options

Working capital finance allows your business to unlock the value of inventory and/or receivables in a secure way:

  • Liquidity - Effectively smooth the cash cycle for businesses exposed to seasonal sales

  • Utilisation - Obtain access to working capital as a result of linking drawings to asset availability

  • Flexibility of repayments - Cash generated from your receivables is a primary source of repayments

  • Working capital finance is a business loan that can help you take care of your immediate and day-to-day costs.

    Like the name suggests, having this type of financing means you have the capital to cover vital operating costs like paying suppliers, covering wages or adding inventory to make the most of busier business periods.

    Importantly, it also means you can have funds at hand when you need them to create growth and make the most of any opportunities when they happen.

  • Sometimes called Invoice Finance, Debtor Finance or Accounts Receivable Finance, this is like a cash advance based on the sales you’ve already made to your customers, without having to wait for the traditional 30, 60 or even 90 day payment periods.

    In simple terms, a lender considers the invoices or monies you have owing as an asset. They’ll lend you a percentage of the money that’s owed to you, then pay you the remaining balance once they’ve collected the invoice, less a small percentage.

    This type of financing is a relatively quick and flexible way for your business to maintain cash flow, and can have many benefits when compared to other bank loans or lines of credit.

  • A faster way to access finance for everyday expenses.

    Unsecured business loans are a relatively new option for businesses that need to get access to some extra funds. The obvious benefits of this type of finance is the speed in which access is granted to the finance, with simplified application process. This may allow you to quickly take care of cash flow, cover urgent expenses, or make the most of an opportunity.

    In recent years, a number of agile, financial technology (fintech) lenders have entered the finance market in Australia. These more non-traditional lenders can turn around approvals and deposit cash into your account in as little as 24 hours. Because they are unsecured the application is simpler and the loan amounts are often smaller – usually anywhere from $5,000 to $250,000. It also means there is greater risk to the lender so the interest rates may be relatively higher and the loan terms a lot shorter, with principal and interest repayments generally on a weekly basis but sometimes even daily.

    While the access to funds can be handy, it’s important to weigh up the repayment terms and amounts to make sure this short-term cash injection helps your business over the short and medium-term.

  • Finance your imports, exports or inventory, with funding that's structured around your trade flows and matches your business cycle. Examples:

    1. Export & Import Documentary Letters of Credit & Collection

    2. Trade Advances

    3. Bank Guarantees

    4. Standby Letters of Credit

Real Success Stories

  • Manufacturing Success: From Renter to Owner

    The founder of a high-tech manufacturing company was operating in a rented warehouse, which limited expansion and increased expenses due to rising rents. Deciding to invest in the company's future, they obtained a Commercial Property Loan to purchase a strategically located factory.

    Owning the property allowed for customisation and expansion of manufacturing capabilities, turning a recurring expense into a valuable asset, improving cash flow, and laying a foundation for long-term growth and innovation.

  • Equipping Success: A Logistics Company's Journey

    A growing logistics company faced the challenge of expanding its fleet while managing cash flow. The Asset Finance solution provided by Shire enabled the acquisition of state-of-the-art vehicles, enhancing delivery capabilities and efficiency.

    This strategic investment, supported by manageable repayment plans, positioned the company as a leader in logistics services.

  • Building a Secure Future with Smart Investing

    A couple, planning for retirement, used their Self-Managed Super Fund (SMSF) to invest in property. Shire's SMSF Loan helped them purchase a rental property, adding a steady income stream to their retirement funds.

    The guidance provided on regulatory compliance and investment strategies made this a smooth and profitable venture.

  • A Boutique's Journey to Property Ownership

    Co-owners of a thriving fashion boutique were grappling with escalating rent that threatened their profitability.

    They decided to invest in their future by purchasing a storefront in a prime retail location with the help of a Commercial Property Loan. This move not only eliminated their rental expenses but also reduced their operational costs, allowing for reinvestment in the business and growth in customer base and revenue.

  • Construction Firm's Green Initiative

    An eco-friendly construction firm aimed to integrate sustainable technology into their operations.

    Asset Finance from Shire facilitated the purchase of solar-powered equipment, reducing the firm's carbon footprint and operating costs. T

    his move aligned with their green philosophy and attracted new clients interested in sustainable construction.

  • From Shares to Property: A Diversified Portfolio

    A financial advisor recognised the potential in diversifying their investments. Through an SMSF Loan from Shire, they added a commercial property to their portfolio, which was previously dominated by shares.

    This strategic move diversified their investment risks and opened up new avenues for income generation.