CASE STUDY:
Invoice Factoring for a Manufacturing Company
Other CASE STUDIES
Client Overview
Company: All Weld Group, Inc.
Location: Las Vegas, NV
Industry: Manufacturing
Annual Revenue: $3M
Background
All Weld Group is a contract parts manufacturer for various aerospace component manufacturers. All Weld has very sophisticated resistance, and EBW welding machines are not commonly found in the U.S. Given the company’s locality, it benefited from other manufacturers in the U.S. who needed a quick turnaround of work.
Challenges
- Slow Payment Terms: Most of All Weld Group’s customers require a minimum of Net 60-day payment terms, with payments often received close to 90 days.
- Supplier Demands. Given the high raw material cost, All Well had limited credit with its suppliers and often had to pre-pay to obtain goods.
- Demand: Due to the type of components they were contracted to manufacture and their customer base (aerospace, automotive, and medical), there were strict delivery schedules that had to be met.
Solution
All Weld found Gateway Commercial Finance through an equipment leasing broker that supplies financing for All Weld’s equipment. All Weld’s customers were highly creditworthy, and leveraging off of the quality receivables was the smart move to ensure daily cash needs were met.
Factoring Process
- Invoice Submission: All Weld submitted invoices to Gateway weekly.
- Advance Funding: Within 24 hours of submission, All Weld received an 80% advance on their invoices.
- Balance Payment: After the customers paid the invoices, Gateway released the remaining 20% minus a small factoring fee.
Results & Impact after 30 days
“I was surprised I did not know about factoring before as we would have used it. It literally changed our stress levels overnight. With reliable cash, we were able to get our suppliers caught up, material came in, and we could turn it around while maintaining delivery schedules. Fantastic tool, and it’s been a great experience with Gateway.” — Robert G, CEO All Weld
- Stable Cash Flow: On day one, All Weld immediately benefited from the cash infused, coming current with suppliers and other liabilities and freeing up raw materials.
- On-Time Delivery: The company managed to complete customer orders, ensuring deadlines were met.
Conclusion
All Weld is a perfect case study for the correct use of factoring. Quality customers and extended payment terms equal intense cash flow challenges. Factoring ensured delivery schedules were met, increasing confidence in All Welds’ customer base and giving them additional orders.
Learn more about this service
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Talk to our managing director to learn how invoice factoring can benefit your manufacturing business. Call 1-855-424-2955 or contact us to learn more.