Running a manufacturing company is a round-the-clock job between sourcing the best materials and keeping on top of production. One factor that keeps every area of your business happy is cash flow. After all, healthy cash flow for a manufacturing company keeps your lights on, helps you expand and makes for happy employees and clients.
However, according to accounting software Xero, more than a third of Australian SMBs are forced to dip into their personal savings to keep up with their business's cash flow. This can put a massive financial strain on your budget, especially when you’ve got ongoing bills to take care of.
The financial challenges manufacturers face
Manufacturing companies have been tested to their limits over the last few years, with the pandemic and other economic factors causing a price increase in manufacturing equipment and raw materials.
The COVID-19 pandemic continues to disrupt supply chains and cash flow, forcing many manufacturers to resort to alternative financial measures, such as business loans or manufacturing equipment financing.
But do these financing alternatives have a business's best interests at heart? Let’s explore them further.
Current manufacturing finance options
No matter what industry you’re in, every business needs some help with its cash flow now and then. And whether you need to pay suppliers or purchase new equipment you’ve likely considered approaching a lender or credit provider.
Most business loan lenders promise the world. However, there are a few things to be wary of. Small business loans or manufacturing equipment finance options often have high-interest rates and soaring upfront or ongoing fees. These expenses can be demanding for any business, especially those with existing cash flow issues.
Our research found that of the 260,000 small business loan applications submitted yearly, only 182,000 are approved.
And with tighter lending regulations at play, some manufacturing companies may be rejected altogether, leaving a black mark on their business's credit file.
Small business loans and credit cards are also incredibly risky — if you default on a payment, the lender or credit provider may come after your business or personal assets. And in some instances, the lender may also ask you to use your company as collateral against the loan.
So with all this in mind, you might be wondering how do I improve cash flow in a manufacturing business without the risk and added expense? It’s time to meet Marmalade.
Marmalade — the new way manufacturers can get paid
Over the last few years, we’ve seen many businesses miss out on opportunities to reach new heights because of unsteady cash flow. So we decided to do something about it.
Marmalade is a world-first in invoice payments, allowing businesses to get paid on their own terms. Manufacturers can get paid early for their eligible invoices and receive the funds within 24 hours. This puts the power back into your hands and gives you the freedom and flexibility to grow your business however you see fit.
Here’s how it works
- Sign up to Marmalade and create your account
- Issue invoices with your unique Marmalade Virtual bank Account details
- Select the invoices you want to cash-in
- Get paid within 24 hours
- Spend that money however you wish
With Marmalade, you’ll have total visibility over your invoices from when you issue your first invoice to when the funds are transferred to your bank account. Unlike other financing options, Marmalade is the only platform specialising in paying invoices and the only solution that isn’t a liability.
What sets Marmalade out from the crowd
Marmalade is not a lender or credit provider, so we don’t charge any interest, the major difference between us and lenders is that we take on the credit risk of non-payment. We won’t come clawing the money back if you don’t get paid. We’re also transparent with our pricing. There are no lock-in contracts, hidden fees or sneaky subscription charges — with Marmalade, there’s never any nasty surprise around the corner.
Our platform integrates seamlessly with Xero and Quickbooks, allowing businesses to easily issue and track invoices without the extra admin. We’ve kept the process super simple, so you can get back to doing what you do best: running your company.
Maintaining healthy cash flow for a manufacturing company is critical. So why not streamline the process by signing up to Marmalade? Transform the way you manage cash flow and get started today.
Trusted by hundreds of Australian businesses
Unsteady cash flow can impact your relationships with suppliers and your employees. As there are many components to running a manufacturing company, the two biggest causes of cash flow problems are:
- Overinvestment — Many manufacturing companies stockpile inventory or invest heavily in new equipment as they believe it will increase production capacity. Manufacturing cash flow relies heavily on supply and demand, so if the demand for your product diminishes, you may not be able to recover the invested funds.
- Long payment terms — Manufacturers generally give customers long payment terms as a gesture of goodwill. However, this can result in unsteady cash flow and impact different business areas.
Learning how to fix cash flow issues in the manufacturing industry comes down to assessing the areas you can cut back on or improve. For instance, you may consider selling excess stock and refraining from purchasing any new stock. Cutting back on unnecessary spending is another easy fix.
Marmalade provides fast and more importantly, sustainable financial relief to everyday cash flow issues without risk or extensive expenses. By having total flexibility over when you get paid, you can plan more strategically around the future growth of your business. And unlike a lender, Marmalade is an interest-free service that absorbs all risk of non-payment.
If you want to learn more about how Marmalade works or have any questions about our product, please do not hesitate to contact our friendly customer service team at (03) 9917 8567 or submit an enquiry.
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For more information on how Marmalade can revolutionise your manufacturing business with instant invoice payments, please get in touch TODAY!
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