A prominent story in recent news told of Rio Tinto’s move to increase their payment terms from 45 days to 90 days which would have affected $24 billion in supply contracts, many of them being contracts with small business. This of course, raised the ire of business owners and business commentators alike. Rio Tinto changed their mind following the outcry.
It was this very same situation that Dave and Sue Fullgrabe found themselves in some years ago. Their recycling business had a number of resource companies as clients who all dictated their own credit terms, with most being considerably more than 30 days, a tough situation for a small business to be in. With some work involving the cleaning and supply of up to 8,000 44 gallon drums, the sum of money involved was not small change.
Dave and Sue needed to improve their cash flow and Dave knew of factoring as an option, as his parents had used this facility when running their own business. Dave considered factoring to be a viable option and a lot less stressful than approaching a bank and dealing with the all the administration and paperwork. They also did the sums comparing a Factor to options such as an overdraft and factoring was still the more attractive option.
Cashflow Debtor Finance (CDF) was one of the Factors the Fullgrabes contacted. Both felt the company listened and understood their situation. CDF was also willing to discuss their business, offer advice and work with them. Dave describes working with CDF “like one used to do with an old-fashioned bank manager, someone to talk to and who provides good customer service.” “Customer service like it used to be” he added.
Sue and Dave now run a transport company and although they could run their business without using a Factor, they have chosen to stay with CDF because it is so much easier than managing this aspect of the business themselves. Outsourcing their accounts receivable means they can get on with activities to grow their business.
Dave said it has a lot to do with the people at CDF, the regular communication and their willingness to go the extra distance. He said, “I know that at any time I want to know who owes us money, we don’t have to spend time working it out, the information is readily available straight away.”
It is now more than eight years since Dave and Sue started using Cashflow Debtor Finance and they have no intention of changing this part of their business, even as their transport business is growing.
Loyalty is a powerful thing and in this business relationship, it works both ways.