The Christmas cash flow squeeze can begin well before the festive season. This makes September the perfect time for you to help your business clients look ahead and identify whether their existing working capital facilities remain appropriate for the months ahead.
From September, stock, materials and extra payroll begin to build ahead of peak trading. December and January then bring fewer trading arnd banking days, along with slower collections. By February, clients may be juggling payroll, restocking and the October to December activity statement, due on the 28th, before peak-season cash has landed.
Seasonal pressure is predictable, which makes it fundable. A client who can see the gap in a forecast still has options. The same client calling in January, with suppliers, payroll and the ATO all pressing, has far fewer.
This year’s gap may also be sitting on top of added pressure: slower customer payments, super that needs to clear every pay cycle, and higher costs to carry tax debt. A facility sized on last year’s trading may not cover this year’s timing.
That means every conversation this month about stock, payroll or tax is also a working capital conversation.
Connective Cashflow gives you two revolving credit lines to help cover both ends of the trading cycle, with no upfront real estate security:
Many clients need support on both sides of the cycle. Existing bank facilities can stay in place, and clients juggling multiple cash flow lenders may be able to consolidate into one facility.
If a business client is preparing for seasonal stock, payroll or tax commitments, contact your Connective Lending manager to discuss the options available.
