I was fortunate to attend the Bill Evans Economic Briefing from Westpac recently. Some of the points that caught my attention are:
- The massive increase in shipping costs that are forcing business costs up.
- Supply shortages are not only driven by COVID – but in the building industry are also driven by a housing boom in the US.
- Inflation will increase to almost 6% but will lower in late 2023.
- Mortgage rates up to 6% in 2024.
- Housing Prices to fall back to April 2021 level.
To “super summarise”, it sounded to me like “it’s going to be another stressful 12 months – though things are looking like settling down a bit in 2023.”
What that means to me is that now is NOT the time to relax – it’s actually time to have a surgical and strategic look at your finances and your working capital.
Instead, it’s a good time to:
- Do a financial strategy review with someone who can help you see the big picture around your business finance (because if you fail to plan/ you plan to fail)
- ASK AN EXPERT whether you could qualify for SME Recovery (assume nothing – ask)
If you’re looking ahead, you could find strategies that protect your business operations. For example:
- Using Trade Finance to keep your materials flowing – whether local or imported inputs
- Fixing interest rates on business loans (SME Recovery or other)
- Exploring whether Invoice/Debtor finance could help you manage around sudden price increases?
- Considering whether Trade Credit (or other) Insurance could protect you as more businesses struggle?
The best time to talk to a Working Capital Strategist is BEFORE you need their services.
Give me a call if the cash gap between when you pay your suppliers and get paid by your customers is getting harder to manage.
Martin Cattach
+61 407 477 555
Discussion on working capital and funding options:
https://calendly.com/martincattach/confidential-discussion-on-working-capital-requirements
