Cashflow finance is emerging as a new source of funding for take-overs and management buy-outs. Brisbane-based metal finishing company, C.P. Plating, recently used this approach to fund a takeover.

"We were taking over the business of a major competitor and could not get help from our bank," said C.P. Plating managing director, Chris Burgess.

"All the bank seemed to be interested in was bricks and mortar security but fortunately we were introduced to Scottish Pacific Business Finance by our financial consultant," he said.

In the wake of the successful takeover, C.P. Plating has moved to new and larger premises and recently established another sophisticated coating plant in Brisbane for the telecommunications and defence industries.

C.P. Plating also uses the Scottish Pacific Business Finance factoring facility. "If we had to handle our own debtor management, we would need another half-time administrative staff member on the payroll," said Mr Burgess.

Scottish Pacific Business Finance has provided takeover or management buy-out finance for a number of companies, mostly in the $10-30 million turnover bracket, with the facility secured against future cashflow.

Although it is a relatively new trend in Australia, cashflow finance has been used in this way for many years in other countries with more mature factoring and invoice discounting industries.