©2013 putting the flow back in cash flow. ©2013 let us ask you these 3 questions how many of you...
TRANSCRIPT
©2013
Putting the flow back in cash flow
©2013
©2013 www.arapcapital.com.au
Let us ask you these 3 questions
How many of you have clients who want to grow their business?
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©2013 www.arapcapital.com.au
Let us ask you these 3 questions
How many of you have happy clients who, from time to time, have the odd cash flow challenge?
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www.arapcapital.com.au
©2013 www.arapcapital.com.au
Let us ask you these 3 questions
How many of your clients NEVER have cash flow challenges?
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©2013 www.arapcapital.com.au
Ron’s story …
Ron has an excavation business. Employs 3-4 people – each running a machine. He’s one of the best in the business – digging for the major property developers.Turnover is roughly $100k per month.Cash flow is tight due to running costs, projects are in pipeline, but can’t afford to start as he needs funds to do this.
How …
… helped Ron
©2013 www.arapcapital.com.au
©2013 www.arapcapital.com.au
Selected 2-3 invoices from specific debtors1
Invoices assigned to Arap Capital2
Paid an advance of $80,000 per month ($100,000 worth of invoices) within 24 hours3
Only funded the amount he needed4
Facility ‘turned off’ when cash flow manageable
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©2013 www.arapcapital.com.au
… offers a professional, fast and simple cashflow solution …
©2013 www.arapcapital.com.au
$5,000 - $300,000 cash advance in as little as 2 hours
No property or debenture security required
©2013 www.arapcapital.com.au
How does Arap Capital engineer this simple cash flow solution?
©2013 www.arapcapital.com.au
Single or multiple ‘invoice finance’ facility
Advance amounts of up to 80% of invoice(s) total
Simple documentation
24 hours approval process
Present or planned borrowing arrangements are not impacted
©2013 www.arapcapital.com.au
Product differs to most financiers
Factoring business and Banks (Debtor Loan)
Invoice Amount$400k+++
Invoice Value$5k
Multiple Invoices Factoring/Finance
Single Invoice Factoring
Arap Capital Arap Capital
$200k+
©2013 www.arapcapital.com.au
Target businesses … profile
SMEs
Manufacturing, wholesale, business service providers e.g. labour hire
Strong profitability but weak balance sheets
©2013 www.arapcapital.com.au
Target businesses … profile
High growth mode and need funds to develop/expand
Exhausted all other forms of traditional banking finance
©2013 www.arapcapital.com.au
Target businesses …. their need
Short-term cash flow solution which will not impact their current banking arrangement(s) and meet immediate business demands
©2013 www.arapcapital.com.au
3 Simple steps to providing cash flow
Arap Capital purchase invoices and pays up to 80%
Full payment from debtor to Arap Capital received, balance paid to the client less fee
Client selects invoice(s) they require immediate payment for
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©2013 www.arapcapital.com.au
Example
Debtor pays account in, (say), 20 days
Invoice Value $50,000
Immediate Payment (80%) $40,000
Invoice discounted fee to Arap Capital 5.5% $ 2,750
Add Debtor insurance (1.0%) + GST $ 550
Residual payment TO client $ 6,700
Total payment to client $ 46,700
©2013 www.arapcapital.com.au
Client profiles
Engineering Company
Family business
Many small clients
1 large client representing approximately 80% of turnover
©2013 www.arapcapital.com.au
Client profiles
Architectural CompanyLong trading history
Staff of 8
New major projects
©2013 www.arapcapital.com.au
Client profiles
Construction CompanyRelatively newly established
Very few clients
Still grappling with administration functions
©2013 www.arapcapital.com.au
Client profiles
Importer & Wholesaler
Small Family business
Only 2 (solid) customers
©2013 www.arapcapital.com.au
How we can work with you
Businesses that have optimised their current banking facility e.g. OD at maximum, fully leveraged etc.
“Care-taking” whilst setting up new finance bank facility with you
Assist ‘new’businesses without trading history
Finance “declines” - businesses that fall outside your finance criteria
©2013 www.arapcapital.com.au
How we can work with you
Not aligned to any particular FI
Single product offer, i.e. only offer invoice finance
Transactional - single invoice finance
24 – 48 hour approval and 2 hour transfer once approved
©2013 www.arapcapital.com.au
Frequently Asked Questions
Repeat users?
Security of Payment?
Yes. There is a 70-80% repeat rate despite no contractual obligation
Obligation for client company to repurchase invoice
Personal guarantee of client company principle
No property
©2013 www.arapcapital.com.au
Frequently Asked QuestionsFees?
Debt Collection?
Full Disclosure?
5.0% - 9.5% of invoice value; typically 7.5%
Time based scale
No. We only purchase current invoices
Full disclosure is when the debtor is aware of our involvement
All transactions are fully disclosed to the debtor
©2013 www.arapcapital.com.au
Frequently Asked Questions
Client credit criteria?
Consumer debtors?
Solid debtor and good debtor relationship
Business invoices (debtor) only
