Securing finance to support cash flow
Three tips to set up for success
In the natural resources, mining services, engineering and construction sectors, cash flow is one of the biggest challenges businesses need to navigate, and having the right finance mix can make all the difference.
Strong cash flow management enables your business to run efficiently and seize new opportunities with confidence.
Our State Director, WA, Business Financing, Aleks Henderson, emphasised that understanding the specific liquidity pressures your business faces, both short and long term, is a crucial step in assessing growth strategy potential. When it comes to securing additional finance, this insight could be the difference between accessing sufficient funding to pursue that growth strategy and limiting your prospects.
The support from Export Finance Australia was make or break. It not only helped free up cash for the business but also helped us remove a high-interest financing product that we were using month to month.
Steven Bowron
Chief Executive Officer, BMR Piping & Civil
“When businesses identify potential pressure points upfront, they can approach discussions with lenders with greater clarity and confidence, and work through a financing solution with a clear plan,” Aleks added.
When considering the need for additional working capital, here are some steps you take to help ensure your business is well positioned to approach a bank, another financier or one of our experts for support.
1. Understand your cash flow requirements
Regular, ongoing cash flow forecasting, both short and long term, helps uncover potential triggers and the timing of liquidity shortages in your business, ultimately facilitating better forward planning. This might mean having early and frequent conversations with your internal advisors, bank or finance partner so they can better support your needs and advise on ways to navigate a cash flow gap.
For example, after securing two major mining contracts, BMR Piping & Civil needed our support with contract security bonds to free up liquidity needed to deliver both projects simultaneously.
Brad Gosling, our Associate Director, WA, Business Financing, said, “When businesses combine a clear understanding of cash flow and plan ahead with the right support, securing finance becomes much more streamlined. It’s about being prepared before you need it.”
Streamline Connect
2. Ensure you have a trusted internal advisory team
Your team plays a crucial role in enabling your business to identify opportunities and determine financing strategies for growth.
Whether it is your internal finance team or a third-party advisor, keeping these individuals close to your business’s evolving growth strategy and goals will ensure they can effectively prepare for and advise on the best ways to finance additional contracts.
Mining services business Streamline Connect worked with our team, following a recommendation from its bank to utilise our bonds to meet contract security requirements for performance and warranty. Our support ultimately freed up the cash flow required for mobilisation across a couple of large contracts commencing at a similar time.
Aleks highlighted that "when your advisors are across your strategy and any upcoming challenges, which do happen from time to time, they can assist you to unlock funding opportunities that might otherwise be missed.”
3. Build and maintain strong relationships
Business partners that understand your business are invaluable when operating in the mining services and construction sectors.
Building and maintaining strong relationships with customers, suppliers, freight forwarders, labour-hire agencies, business advisors and business membership associations is key. Flexible and agile working relationships will ensure businesses are well positioned to secure the support they need for tendering for new business and contract negotiations.
Platinum Blasting Services credited strong engagement with finance partners for helping tailor support to its specific operational needs, ensuring continued delivery and growth.
Brad emphasised the importance of relationships like this right across a business’s operations. “Relationships are just as critical as the numbers. Businesses that nurture trusted connections with partners, suppliers and advisors are better positioned to respond to opportunities and navigate cash flow pressures.”
Whether you’re considering expanding your capabilities internationally or simply looking to increase your stock levels for new contracts, we can play a key role in partnering with you and providing your business with financing solutions.
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