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How our Trade and Debtor Products Help Wholesalers

Inside our office when we're dealing with this whole cash flow management mechanism for this specific wholesaler payment and payee scenario. When we're talking about the backend of the transaction, we're talking about debtors, debtor finance, it's a product that's been in place for many years. It's a product that we have transacted many tens of millions of dollars through, but it almost fell out of vogue a few years ago as the amount of fintech’s and working capital products came on the market. Nevertheless, when you are being paid on terms, maybe by a large corporate, maybe by the government, it might be 30, 60, 90 days from end of month. You've done the work and you have to wait to be paid. It is crippling.

I have a wholesale business at the same time as finance, and it is crippling when you know you've done everything you can do. And the terms are that onerous that you're underwater. Now that is your $100, $100,000, whatever it might be. So what we do is we leverage against the debt, leverage against the debt book and we bring forward the earnings. So give you access to 80 or 90% of your invoiced value based on your age debtors. Now that's wonderful because two rules about cash flow is: bring your debtor days in and take your creditor days out. Creditor days are what we call the front end of the transaction. That's what trade facilities are for. This has been a massive growth piece for us, for the market, availability, with the use of fintech’s, with the use of all these bank statement analyses.

Now, what does that look like? If you have to pay a contractor or you have to pay for inventory or you have to pay for stock overseas or however it is, you have to pay 50% upfront, then cash once it lands in Australia, and then you've still got to work your magic. Then you've got to sell it. Then you've got to invoice it. And then you get paid. This is the front end of the transaction. And what we do is rather than having to pay out of your own cash flow on day one or the deposit, we give you terms on that.

So we pay the supplier for you. We pay your inventory supplier for you, your stock supplier, and we give you terms to pay off that. Whether it be 30, 60, 90, 120 days. Rates are good, rates are very much single digits. It's a very quick and easy product to put in place. And it's something that has just enabled so many of our network, especially over the last couple of years. It's a wonderful piece. And when you can match trade and debtor and you can balance it internally throughout AI mechanisms and our own tech. It is such a powerful tool. Bring your debtor days in, take your creditor days out, the business owner can breathe a sigh of relief. And I wholly know how that feels.

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