For many small to medium business owners, cash flow issues are a fact of life.
Xero’s recent Small Business Insights survey showed that in the year to June 2018, just half of New Zealand small businesses were cash flow positive in any given month.
On average, New Zealand small businesses were paid 8.3 days late in June 2018, according to Xero. Cash flow issues can bring business to its knees. With the New Zealand small business sector making up 97 per cent of our workforce and a strong economic driver, the potential repercussions are far-reaching. When small business productivity slows, the whole economy does too.
Nick O’Connor knows how stressful it can be for businesses to try to maintain working capital between invoice payments. The Kiwi entrepreneur, who has owned and run several ventures himself, first identified the need for an alternative form of invoice finance while based in post-earthquake Christchurch.
“After the earthquakes, I faced cash flow issues in my businesses, as did many of my friends and contacts. Businesses just needed some extra help to stay afloat between invoice payments, given the massive unforeseen disruption which had hit the local economy,” he says. Traditional invoice factoring services provided via banks just didn’t suit many of these business owners, who just needed to bridge the gap so they could keep operating while they waited for their invoices to be paid.
Nick started working with several businesses to address this issue by buying their unpaid invoices – providing a much-needed cash advance – and then debiting the amount back once their customer had paid.
This was the precursor to Buffer, a low-hassle service which allows businesses to stay cash positive and the flexibility to call on an advance only when it’s needed.
With a growing number of businesses in various sectors nationwide now using Buffer, Nick says the feedback he hears most often is how much his clients appreciate the confidential, hassle-free and fast service.
“Buffer is all about helping small to medium businesses continue growing, by maintaining cashflow until invoices are paid. Unlike invoice factoring, we don’t take over all your invoicing or lock you into a minimum period with a monthly fee. We simply allow you access to cash when you need it, for a one-off fee each time” - Nick O’Connor, Managing Director