Innovative lender helps small businesses thrive
Eric Doucette’s cabling business is booming. The Ontariobased small business has clients across Canada with revenues exceeding $ 1 million. Its customer base includes some of North America’s largest retailers. Yet, as with many burgeoning businesses, Logical Cabling’s growth also comes with its share of associated challenges.
The company’s r apid growth has involved a constant need for free cash flow to ensure it can purchase supplies and pay its staff to keep pace with the demands of a successful, growing business.
And that’s where Logical Cabling — like so many other successful small businesses — hit some financial speed bumps. While big clients involve big contracts, they also often take longer to settle their accounts.
“A lot of them can take anywhere from 90 to 120 days, and others even more than that,” says Doucette, president of Logical Cabling. “It’s just the nature of doing business with larger customers.”
Consequently, the company has, ironically, been flush with new business but frequently short on available cash to fund its growth. To keep pace in the past, it had no choice but to borrow at very high interest rates to cover its cash flow needs until outstanding accounts were paid.
Yet that situation changed recently for the better after a colleague suggested Doucette consider Fund-Through, an innovative invoice- funding service for small businesses. Fund-Through’s online service allows businesses to upload outstanding invoices from credit- worthy customers and get them paid in as little as 24 hours. This allows small business owners to continue to offer favourable payment terms to its customers but get access to their cash when they need it — with one click.
“It’s dropped my stress levels by like 50 per cent,” Doucette says. Best of all, the money is there fast — when Logical Cabling needs it.
Fund Through’s CEO, Steven Uster, says Doucette’s story is a familiar one.
Founded in 2014, the To- ronto-based online lender is filling a niche in the marketplace by helping growing Canadian businesses reduce that invoice-to-payment gap down to 24 hours.
“The real value of Fund-Through is we are eliminating payment terms, so businesses that have worked really hard to deliver a good or service no longer have to wait to get paid,” Uster says.
“With us, a business can get onto the platform quickly to get those invoices paid instantly, so that it can then use that money to buy more inventory, take on more jobs, pay staff and contractors, and focus on growing.”
Fund Through is able to fund these growing businesses because, unlike the banks that look at the credit strength of a business, funding is based on the credit reputation of who you sell to. It’s not a matter of if Fund-Through’s customers are going to get paid, it’s just when. Now a deal with a good customer that looks great on paper actually works in practice because the hard part, waiting to get paid, is eliminated.
Fund Through’s online platform makes the entire process — from signing up to getting paid — simple.
“Without Fund-Through, I wouldn’t be able to take on some of the jobs that I take on,” Doucette says.
Like a growing number of other successful small firms in Canada, Fund-Through’s services have quickly proven themselves indispensable to Logical Cabling’s growth.
“Fund-Through has been truly the best thing that’s happened to our business,” Doucette says.