For construction companies in New Zealand, labour hire can present a cash flow management problem.
Staff pay often occurs weekly or fortnightly, while clients only pay invoices on 30, 60 or even 90 day terms. This creates a significant cash flow gap that can be tricky to navigate successfully.
Invoice Finance bridges this gap by providing advance access of up to 85% of the value of the outstanding invoices.
Discover how Invoice Finance with ScotPac can help you manage construction labour hire without putting undue pressure on cash flow.
What Cash Flow Challenges Does Construction Labour Hire Face in New Zealand?
Businesses needing to hire construction labour face immediate payroll obligations while at the same time have to wait for delayed client payments for invoices issued. This can create a gap as long as three months between the cash flowing out of the business and the cash flowing in.
When the industry faces unexpected costs, like material fluctuations, this can lead to an even more difficult situation, and the cash flow management challenge can be even worse.
Invoice Finance offers a flexible and scalable solution for businesses needing to hire labour for construction to secure the working capital they need on time to pay their expenses.
How Does Invoice Finance Help Construction Companies Fund Staff Before Client Payments?
Invoice Finance works by providing advance access to otherwise inaccessible working capital in your outstanding invoices. You can access up to 85% of the value of the unpaid invoices and use the immediately accessible cash for payroll and labour hire.
How does it work?
- Issue your invoices to your clients
- Submit those invoices to ScotPac for funding
- Receive up to 85% of the value of the invoices
- Collect payment from your clients according to the original terms
- Receive the outstanding balance from ScotPac less any applicable fees
What are the Benefits of Invoice Finance for Construction Companies?
Invoice Finance is a unique financial solution for use in the construction industry for a number of reasons:
- There is no need to put up security or other personal assets as collateral
- There is no need to take on additional debts as with other forms of finance
- You can scale your access to working capital as your sales grow without additional applications
- You can maintain control of which invoices and when you submit them for additional working capital
Why Is Invoice Finance Ideal for New Zealand Construction Labour Hire Businesses?
For many construction businesses needing to hire labour, access to sufficient cash flow is an ongoing problem.
ScotPac has over 35 years of experiencing customising Invoice Finance facilities for small and medium sized businesses needing working capital to fund their payroll and other expenses. So why is Invoice Finance the right choice?
- Your outstanding invoices serve as the collateral itself
- Your business needs only turnover $10,000 monthly in invoices to qualify
- You can choose confidential arrangements to ensure your client relationships are not impacted
- You can choose to use the advance funding to pay wages, further debt consolidation or even for market expansion and new contracts
How do you qualify for Invoice Finance in New Zealand?
Unlike traditional bank loans, at ScotPac we have cut the red tape for business finance applications. Our application process is completely online and, with the right documentation in hand, can be completed in just 5 minutes.
However, to be eligible, you will need to be able to answer yes to the following:
- Do you invoice other businesses on standard trade credit terms?
- Have you been operating for at least 6 months?
- Are your customers creditworthy, New Zealand-based businesses?
- Do you generate at least $10,000 a month in revenue?
- Are you registered in New Zealand?
- Do you issue invoices in New Zealand dollars?
