What's in the Christmas stocking for brokers?
Why, it's a spike in debtor finance activity...
Christmas is a busy time for everyone. Everyone wants to shut up shop and close for the holidays as quickly as possible but in the world of debtor finance, this holiday period can be when activity spikes.
Every business owner wants to maximise their cashflow ahead of the Christmas rush, but what does it mean for brokers?
More often than not, it means more requests for financing and a higher level of stress to do with. But just how much more activity?
A Christmas rush in more ways than one
Figures from the Debtor and Invoice Finance Association show that the December quarter is traditionally a busy period for debtor finance. In 2015, there was $16 billion in invoice discounting turnover during the three months to December - a full $1.5 billion more than the previous quarter.
In fact, over the previous eight years, the data shows that invoice discounting activity is higher in the December quarter than at any other time of year. Undoubtedly, this is due to businesses trying to expand cashflow and activity to capitalise on the consumer rush.
But just like our eyes tend to be bigger than our stomachs at Christmas lunch and Santa bites off more than he can chew when struggling with narrow chimneys, brokers might find themselves struggling to make room for this surge in activity. What do they do then?
Taking care of the surge early
One of the keys to managing higher demand is anticipating it and addressing it early. Reaching out to businesses that are likely to use debtor finance, or to an existing customer base, could be a good idea.
The Australian Retailers Association has noted that August spending was up 2.84 per cent on the year before, showing just how much more money changes hands every year - helping companies fund their Christmas campaigns early means everyone wins.
On top of this, many companies that don't partake in the Christmas rush will simply shut down for the holidays - often leaving invoices outstanding. Brokers should ensure their clients understand the growth (and the risks) that can occur at this time of year, and help them be financially prepared.
Brokers should also look to make sure that any debtor finance solution that they recommend to their clients will not be a burden to administer. With no month-end reconciliations and unlimited free uploads and overnight drawdowns, Classic Funding Group is well poised to help you out there.
Make the most of the seasonal Debtor Finance rush to fill your own Christmas stocking with the Classic Star Rewards Program, by earning $1000 for every $500K of debtor finance settled.