Mastering the Maze: A guide to Special Situations Finance | Part 3 A Synergistic Approach: Combining Invoice Finance with Asset-Based Loans

Series Introduction

This is the third article of our series Mastering the Maze: A Guide to Special Situations Finance. In this post we delve into Hermes Capital’s innovative approach to SME financing: the strategic combination of invoice finance and asset-based loans.

Invoice Finance Simplified 

Invoice finance is a powerful tool for businesses, allowing them to access funds tied up in outstanding invoices. By advancing up to 80% of the invoice value, we enable businesses to reinvest in growth, negotiate better terms with suppliers, and maintain a healthy cash flow, bypassing the wait for customer payments.

The Power of Combination

What sets Hermes Capital apart is our ability to blend invoice finance with term debt solutions. This dual approach addresses not only the immediate financial needs of a business but also ensures ongoing working capital support. For instance, a business facing a significant tax debt can secure a term loan to settle the debt without draining its operational funds, thanks to the revolving nature of invoice finance.

Real-World Impact: A Case Study 

Consider a transport company in voluntary administration, facing bank pressure and needing restructuring finance. Hermes Capital stepped in with a term debt solution to refinance the bank and support the restructuring plan, complemented by invoice finance to rejuvenate its cash flow. This comprehensive strategy facilitated the company’s successful turnaround and growth post-administration

Next Steps 

By offering a blend of invoice finance and asset-based loans, Hermes Capital provides a lifeline to SMEs, enabling them to overcome immediate challenges while securing their future growth.

Stay tuned for the next blog, where we’ll address overcoming credit challenges in the Australian SME landscape, particularly in light of recent ATO actions.

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