How SMEs Solve Supply Chain Issues with Business Financing

Posted by Saroj Shah on January 4th, 2023

Global supply chains have been severely impacted in the last few years due to the pandemic. If that was not enough, The Russia-Ukraine war, rising freight charges, random factory closures, and a sudden increase in interest rates have only aggravated the situation. In a recent study by the National Australia Bank, 760 SMEs were surveyed about supply chain issues. 26% reported facing significant supply chain issues and 24% of the SMEs considered it to be a recurring issue in the coming months. So, how does a business struggling with supply chain disruption overcome the situation? Can they get help from supply chain finance? Let’s find out.   

(Source: https://www.brokernews.com.au/news/breaking-news/how-are-smes-coping-with-supply-chain-problems-281513.aspx)    

Can Business Financing Solve Supply Chain Issues?

Technically speaking business financing cannot solve global supply chain issues. However, it can help businesses mitigate the cash flow gaps and problems that are common implications of supply chain disruptions. According to experts, SMEs can benefit from business financing solutions like supply chain finance. Let’s take a look.  

Supply Chain Finance to the Rescue

Supply chain finance is a type of business financing that helps you acquire funds using which you can pay your domestic and international supplier invoices. It allows businesses to pay the suppliers in advance, ensuring that they remain stable even with disruptions in logistics. It keeps the cash flow intact and the capital in good shape. Businesses acquiring supply chain finance can spread their expense over a longer period. It reduces the financial risk that impacts the circulation of payments and goods. 

How it helps a business

Companies big and small in Australia can benefit from supply chain finance:

• It helps mitigate financial risks by assuring that the business can pay for the imports with the help of finance secured before time. It streamlines the movement of payment and goods within the supply chain, minimizing disruptions. 
• Supply chain finance stabilizes the working capital, which often takes a toll when subjected to financial and supply chain disruptions. The business financing solution will ensure that your working capital remains robust. In some cases, businesses use the working capital to fund the supply chain. That can cause problems in other areas of business like buying new equipment, paying the staff, etc. Using supply chain finance minimizes the impact on cash flow and working capital, allowing you to make more informed business decisions. 
• Businesses often back out of major projects citing import cost issues. Supply chain finance allows you to maintain a healthy cash flow so that you can ensure continuity in the trading schedule and earn higher revenue.  

Conclusion

If you are struggling with supply chain issues and it’s impacting your cash flow and business operations, connecting with business loan brokers can get you appropriate financing solutions, including supply chain finance and others. On that note, Broc Finance might be just the one that you need at the moment. They are the leading finance brokers in Australia, facilitating a wide range of business financing solutions by tapping into their network of credible lenders. Visit their website to know more.