Four-by-Two – Smart cash flow management
Four-by-Two is an interior design consultancy founded in 2002 and based in London, Edinburgh and Muscat (Oman) specialising in retail, leisure, exhibitions and brand environments for large British and increasingly international clients. The company has a long history of dealing with blue chip clients such as Phase Eight, LK Bennett, and UKTV.
The Challenge
Given its high growth profile, the consultancy is actively expanding into new geographies and working with new clients. This requires cash (marketing, increased labour, higher operating costs) and an efficient way to draw down funding when it is most needed.
With typical payment terms of between 30 and 60 days, unlocking cash trapped in payments outstanding was a priority for Four-by-Two. Factoring was not optimal as the Directors were uncomfortable with paying ongoing fixed monthly service fees independent of whether funding was required, and the length of contractual lock-in. There was no need to outsource credit collection, potentially damaging crucial client relationships. Given increasing business and invoicing in the Middle East, traditional providers would have excluded these invoices from any funding, limiting cash available. Above all, Four-by-Two needed high advance rates and flexibility.
The Marketinvoice Solution
Given the large concentration of revenues from and long track record of dealing with their blue chip customer base, Four-by-Two was well suited to Marketinvoice’s online marketplace and their invoices were attractive to the growing pool of registered global investors. After signing up, Four-by-Two posted selected invoices for sale, obtaining an advance of 85% of invoice face value at a discount fee of just 1% for 30 days. Subsequent auctions have seen advance rates increase up to 90%.
As buyers on Marketinvoice are sophisticated global investors, they understand international business and are willing to fund invoices for services provided outside of the UK. This is just one of the many ways in which Marketinvoice distinguishes itself from traditional funding providers and positions itself as a disruptive innovation in the field of invoice finance.
