Grow a business through invoice financing: Incomlend suggests ways to re-invest working capital

Growing in a recession 

While the threat of COVID-19 has largely ended, the world is now staring down the face of a recession. When businesses slow down, the supply chain will be one of the industries most affected. Fewer goods will be imported and exported cross-border, resulting in even greater issues in working capital.

With such great challenges facing importers and exporters, many are grateful to merely stay solvent. So long as they can make ends meet by paying payroll and key partners, then they are happy. But businesses should not merely content themselves with survival. Even in a recession, the most forward-thinking businesses can grow. 

It’s hard to buy into this idea that an individual business can grow even as the overall economy contracts, but it’s possible. To aid in this task, it’s important to see how other importers and exporters have leveraged an increase in working capital to not only stay afloat, but to make strategic moves that strengthen and grow their business.

Such growth is possible because invoice financing is more accessible than ever

Strategies for deploying working capital  

To understand the breadth of possibilities that come with more working capital, here are some business activities that enterprises can then undertake.

1. Invest in infrastructure 

With more working capital, exporters that manufacture their own products can increase production capacity by purchasing more materials, upgrading their equipment, or adding more infrastructure that improves the process. Such improvements will drive down costs and increase net profits.

The same goes for importers. They can purchase larger wholesale quantities of product, so that they can generate more profit when selling and distributing these items downstream. Such economies of scale will create a two-fold effect: They will not only increase profits, but they will undercut competitors, who they can then take customers away from.

Working capital from invoice financing, in other words, gives enterprises a larger slice of the proverbial pie.

2. Expand product offerings

Even the slowest, most traditional industries are constantly evolving. Importers and exporters need to keep up with the times by always looking for ways to expand their original offerings. These may include improvements to existing products, or different products altogether. 

The same goes with importers, who can even more easily explore what products to complement those in their current portfolio. The greater working capital that comes with invoice financing, in other words, gives importers and exporters the opportunity to take up more shelf space in their customer’s cabinets.

3. Break into new markets 

Importers and exporters need to diversify their business dealings by expanding into new markets. This not only facilitates growth – it is easier to improve from 0 in a new market than grow percentage-wise in an existing market – but it mitigates risk. 

Expanding to other markets is easier said than done, as it requires enormous capital to do business cross-border where a business may have no on-the-ground presence. The influx of working capital from invoice financing can give a business the initial resources to open a market. From there, the revenues generated from new deals in that market can help the business scale up operations there.

Working capital from invoice financing, in other words, can serve as the initial key that opens up a market for long-term capitalization.

4. Hire more staff 

Executing any of the above mentioned strategies will require more people. Investing in more infrastructure may require more technicians, factory workers, or even procurement specialists. Launching in new markets may require local staff focused on marketing, business development, or account management, who focus on communication with stakeholders.

Hiring more people is usually challenging as it is a fixed cost that gets added to payroll. An influx of working capital can ease this burden, so that importers and exporters can confidently hire the talents they need to execute the strategies they deem best.

By acquiring working capital through invoice financing, organizations can fill out the talent pipeline needed to grow the business. 

A wide open playbook 

The beauty about factoring or supply chain financing, is that business leaders can choose to do one of the above, some combination of them, or even all of them.

When they have greater working capital from invoice financing, their playbook opens. No longer do they just have to go through the motions of maintaining their business – they can finally undertake tactics and strategies that will grow their business over the long-term. This is what invoice financing ultimately comes down to: growth.

Media Contact
Company Name: Incomlend Pte Ltd
Contact Person: Federica D’Andrea
Email: Send Email
Phone: +971 507772486
Address:INCOMLEND PTE LTD Member of Factors Chain International 112 Robinson Road #03-03
Country: Singapore