XI Backoffice – Securing access to funding
XI Backoffice is a young event marketing and administration outsourcing company. It uses innovative marketing techniques to help event organisers sell more tickets. Services include voicemail broadcasting, social network marketing, and email marketing.
The Challenge
XI Backoffice works with large, reputable customers, with typical payment terms of 30 – 60 days. Given its lack of trading history, XI Backoffice found it difficult to obtain finance. Joseph Miles, CEO, explains the underlying issues:
“We’re a profitable company, but we were in a situation where we were growing so fast that we were running out of cash in hand. We had the current month’s costs to pay now, but only revenue coming in from a month or two ago. It seems ridiculous to me that the more successful a company is in growing, the less cash in hand this leads to! I didn’t want to give up profitable business just because we couldn’t afford to cover the upfront costs.
Our commercial bank has never been that keen on giving us overdrafts. As a company we’re two years old, but because our first year accounts didn’t show a profit, they won’t lend us sufficient funds to help our growth. they’re not interested in what we’re currently invoicing customers, which surely is more relevant. Traditional factoring companies only seem interested in very big companies, and their fixed contracts seem more expensive than what Marketinvoice is offering.”
The Marketinvoice Solution
XI Backoffice approached Marketinvoice for a potential solution. After a quick review of the business and their high growth profile, the company was approved to auction invoices from their largest customers. To date, XI Backoffice is obtaining cash of up to 90% of total invoice value, with fees as low as 1.5% of invoice value.
