Risk and credit are key features of the business finance industry, and understanding them is crucial for any business owner seeking financing options.
And access to finance can be a key factor in determining a business’s success. However, many businesses struggle to obtain the funding they need, often due to challenges related to credit and risk management.
To shed light on this critical topic, we spoke with Simon Suggett, the COO at Fifo Capital.
With years of experience in the credit and risk function of the business finance industry, Simon shared his insights on the importance of credit and risk management, and how businesses can better understand these factors to access more financing options and achieve their growth goals.
In this article, we’ll dive into the key takeaways from our conversation with Simon, and explore how businesses can work to overcome the challenges they face when seeking financing.
Over my 35-year career in the business finance sector, I’ve had the opportunity to work with a diverse range of businesses across multiple industries which has helped broaden my knowledge and shape my thinking.
Naturally, over time, as my experience grew, so too did my exposure to a variety of obstacles that ultimately caused me to challenge the orthodoxy and look for alternative ways to achieve desired outcomes securely for clients, culminating in helping them to access the funds they need to grow.
Today, as the COO at Fifo Capital, I’m proud to say, innovation, creativity and flexibility are words best used to describe our everyday thinking as to how we can help businesses in Australia overcome the challenges of accessing funding. Smart and strategic financing solutions enables businesses to unlock their full potential, which is at the heart of what we do.
One of the biggest challenges facing businesses is the lack of collateral or credit history that traditional lenders require for loan approval. This can be especially challenging for small and medium-sized businesses that are just starting out or have limited financial resources.
That’s where Fifo Capital is different. We understand that these businesses are essential players in the finance ecosystem. That’s why we specialise in assessing businesses based on their cash flow and future potential, rather than just collateral. We believe in supporting and empowering good businesses to achieve their goals and reach their full potential.
In addition to this, many businesses also lack financial literacy and knowledge of the credit process. At Fifo Capital, we understand that education and support beyond financing solutions are essential for our clients’ success.
Calling on a wealth of experience, our team specialise not only in working capital solutions, but also in providing valuable insights and knowledge to assist businesses in making informed financial decisions.
By working with us, businesses can increase their chances of obtaining financing and unlock their business’s full potential.
My advice would be to explore alternative financing options that specialise in assessing businesses based on their cash flow and future potential, rather than just collateral.
At Fifo Capital, we work with businesses to understand their unique financing needs and offer tailored funding solutions that meet those needs.
Can you share some tips or strategies that businesses can use to improve their chances of getting approved for financing?
There are a number of strategies that businesses can use to improve their chances of getting approved for financing. Here are a few key ones.
● Improving cash flow management by reducing expenses and increasing revenue
● Building strong relationships with suppliers and customers
● Keeping accurate and up-to-date financial records
● Providing regular financial reports to lenders and investors
At Fifo Capital, we work closely with businesses to understand their unique financing needs and assess their creditworthiness based on their cash flow and future potential.
We take into consideration a range of factors, including the business’s industry, credit history, financial statements, business plan and management experience.
Once we have a thorough understanding of the business’s financing needs and credit profile, we can offer tailored funding solutions that meet those needs.
Some key factors we consider when evaluating a business’s risk profile include their cash flow history and projections, industry trends/sector, management experience, collateral and economic pressure points.
We also consider any potential risks or challenges that may impact the business’s ability to repay the loan.
These factors impact financing decisions by helping us determine the level of risk associated with lending to the business and the appropriate terms and conditions for the loan.
One lesson I’ve learnt is the importance of taking a holistic approach to assessing a business’s financing needs and creditworthiness. This means looking beyond just the numbers and financial statements, and understanding the full picture of the business, its industry, and its growth potential.
It’s not just about a credit score or a single financial metric, but also about evaluating the management team, market demand, competition, and other factors that impact a business’s ability to succeed and pay back any financing.
By taking this broader approach, we are able to more accurately assess a business’s risk profile and financing needs, and tailor our financing solutions to their unique situation. This also helps us work with businesses to identify potential areas for growth or improvement, which can ultimately lead to stronger financial performance and better access to financing in the future.
It’s important to understand the importance of risk and credit when seeking financing options.
As COO of Fifo Capital, Simon emphasises the need to look beyond just financial statements and numbers to fully understand a business’s growth potential and tailor financing solutions to their unique situation.
Businesses seeking financing should be aware that risk and credit are crucial factors to consider when looking for funding options.
Did you know that poor cash flow management is one of the primary reasons businesses fail? In today’s fast-paced business landscape, effective cash flow management is more crucial than ever. It is the lifeblood of any business, ensuring that there are sufficient funds to meet financial obligations, invest in growth opportunities, and maintain financial stability. […]
As a small or medium-sized seasonal business owner, you know that cash flow management is crucial to your survival. While your business may experience revenue peaks during certain seasons, the off-season can pose a challenge when it comes to covering expenses. However, securing financing can be even more difficult for seasonal businesses, as traditional lenders […]
Managing your working capital and cash flow can be a daunting task, especially during uncertain economic times. But with the right tools and strategies, your business can navigate these challenges and come out on top. Embrace the storm, they say. But when it comes to your business, it’s better to be safe than sorry. As […]