Traffic Control Start Up Crashes Into a Financial Brick Wall
Two Brothers Having a Go!
Two Entrepreneurial young brothers started a traffic control business. They were very successful and quickly gained some very good work, mainly with government and semi-government bodies
Within 6 months of starting, the new business already had over $180,000 owed to them by their government debtors.
A Grade credit……. You would think!
The Financial Brick Wall
This all sounds GREAT; except, Governments at all levels are very slow payers.
They “say” they are not slow payers, but most SME’s know just how slow things happen when waiting for payment of a Government related invoice.
Because of the slow payment from these “A Grade”debtors, it meant that the company could not afford to pay their own creditors on time.
In order to stay afloat while they waited for government debtors to pay, the company approached their bank for an overdraft.
Rejection from the Bank
Being young and entrepreneurial and clearly having a successful business, it was logical to go to the Bank. After all, the TV ad’s said the Banks were there to help small business.
They end up in a circular discussion. The Bank attributed no value to A Grade Government receivable and required a minimum of 2 years financials to begin to consider an application.
The business was stalled and could not grow; the future looked bleak.
If Your Bank Can’t Do It ……. Nova Probably Can
With just a short discussion with a Cash Flow Finance specialist at Nova, an Offer of funding was done within 24 hrs.
That’s the difference between traditional Banks and Nova. Nova looks at the business and especially the value of the receivables and cashflow.