Even though doing business with the public sector is very rewarding, it can be very challenging for new or growing companies. SMEs cannot withstand the extended cash cycle, where the company can wait up to 90 days to get paid, their access to liquidity remains strapped to meet their short-term obligations.
The public sector has many projects and suppliers with tight set budgets and procedures to meet, making it difficult as well to extend flexible payment terms.
This mismatch has affected the competitiveness of SMEs in particular, and the public sector strategic focus to support SMEs and sustainable development of local businesses.
DAT factoring solutions provided the capacity for the entity to help SMEs access to liquidity at competitive rates, offering them the ability to factor their receivables ahead of their full payment terms to better match their short-term requirements.
The entity was also able to use the forfaiting solutions to access long-term liquidity needed to better plan future projects and development plans. They can securitize their future cash flows and improve their forecasting and budget plans.
For the SMEs/Supplier:
For the Public Sector Entity :