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©2013 Putting the flow back in cash flow. ©2013 www.arapcapital.com.au Let us ask you these 3 questions How many of you have clients who want to grow.

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Presentation on theme: "©2013 Putting the flow back in cash flow. ©2013 www.arapcapital.com.au Let us ask you these 3 questions How many of you have clients who want to grow."— Presentation transcript:

1 ©2013 Putting the flow back in cash flow

2 ©2013 Let us ask you these 3 questions How many of you have clients who want to grow their business? 1

3 ©2013 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? 2

4 ©2013 Let us ask you these 3 questions How many of your clients NEVER have cash flow challenges? 3

5 ©2013 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.

6 How … … helped Ron ©2013

7 ©2013 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 manageable5

8 ©2013 … offers a professional, fast and simple cashflow solution …

9 ©2013 $5,000 - $300,000 cash advance in as little as 2 hours No property or debenture security required

10 ©2013 How does Arap Capital engineer this simple cash flow solution?

11 ©2013 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

12 ©2013 Product differs to most financiers Factoring business and Banks (Debtor Loan) Factoring business and Banks (Debtor Loan) Invoice Amount $400k+++ Invoice Value $5k Multiple Invoices Factoring/Finance Single Invoice Factoring Arap Capital $200k+

13 ©2013 Target businesses … profileSMEs Manufacturing, wholesale, business service providers e.g. labour hire Strong profitability but weak balance sheets

14 ©2013 Target businesses … profile High growth mode and need funds to develop/expand Exhausted all other forms of traditional banking finance

15 ©2013 Target businesses …. their need Short-term cash flow solution which will not impact their current banking arrangement(s) and meet immediate business demands

16 © 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 1 2 3

17 ©2013 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

18 ©2013 Client profiles Engineering Company Family business Many small clients 1 large client representing approximately 80% of turnover

19 ©2013 Client profiles Architectural Company Long trading history Staff of 8 New major projects

20 ©2013 Client profiles Construction Company Relatively newly established Very few clients Still grappling with administration functions

21 ©2013 Client profiles Importer & Wholesaler Small Family business Only 2 (solid) customers

22 ©2013 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

23 ©2013 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

24 ©2013 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

25 ©2013 Frequently Asked Questions Fees? 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

26 ©2013 Frequently Asked Questions Client credit criteria? Consumer debtors? Solid debtor and good debtor relationship Business invoices (debtor) only

27 Contact Mr. Lee Scott


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