Finance for wholesale, distribution & importing/exporting goods.

If you work in the trade of wholesaling, distributing, or importing goods, a trade finance facility may benefit your business. Trade finance works by allowing you to purchase stock or inventory to fulfil an order. Similarly to Invoice Finance, it will allow you to continue completing customer orders, without having to wait out lengthy payment terms on current owed credit.

A Trade Finance facility can be put in place to reduce payment gaps in your trade cycle. Waiting out lengthy payment terms can reduce the amount of sales you are able to make, therefore slowing your income. Trade Finance facilities also allow companies to process larger stock orders with their suppliers, due to bulk discounts. This drives higher sales, and will boost your cash flow. Managing your supply chain is vital for successful companies. A facility with a Trade Finance partner will decrease the time between payments processing within your business, therefore giving support to your supply chain.

Trade Finance has plenty of advantages. It can be used by those who run import/export companies, which other products aren’t available for. International trade is typically a red flag for lenders, although this form of business is accepted with most Trade Finance lending partners.

Importing and exporting goods across the globe is seen as a risk, so the high-street banks are unlikely to deal with such companies. With our consultancy service, we can find you a lending partner that will tailor a product to you, whether you run international trade deals, or trade within the UK. It can also sit alongside other financial solutions you currently use, such as business loans, and invoice finance.

Purchase Order Financing works by your lending partner advancing you an agreed prepayment percentage (usually between 30-70%) of your total order cost. These funds are used to purchase goods from your supplier, to then sell on and make profit.

Due to the import/export nature of the industry, E-Commerce Finance is also available. Similarly to Purchase Order Financing, this product works to forward credit to the eCommerce shop owner to purchase stock. This stock will then be sold on, and the lender will be paid back their loaned funds with an interest fee on top.

There are regulatory aspects to consider when applying for Trade Finance, such as the sales being finished goods is an absolute must.

Invoice Finance is another product that can help those within the International Trade, and Wholesale sectors. This form of financing is a cash flow and working capital solution that provides a line of funding in the form of forwarded payment. A prepayment percentage will be agreed, and will be forwarded to you. This is done to help you ensure payments are never missed to your suppliers, supporting your cash flow, allowing your deals to always run smoothly.

Release funds tied up in your invoices within 24 hours.

It is common knowledge that when a company invoices another, it generally takes anything from 30 days to 120 days (sometimes more) before that company receives payment from its debtor. This can have an impact on business and stop them from continuing to trade, together with stopping their progess to reach their full potential. Keeping on top of your financial management is absolutely vital for a business trying to grow and be successful. An invoice finance facility could be the key. Invoice Finance is a group of funding solutions for SMEs looking to grow, or maintain their cash flow and working capital balance. The main benefit of an Invoice Finance facility is that it massively increases your cash flow potentials. It removes the need to wait out lengthy payment terms, and ensures once work has been completed and an invoice is raised, you have those funds in your business account within 24 hours. This means once you have completed said work, you immediately gain the income. Factoring is a cash flow funding solution. It releases an agreed percentage of unpaid invoices as soon as the invoice is raised (usually within 24 hours). This percentage can be as high as 100% of the value of your invoice, although this varies dependant on multiple factors. The key factors in deciding your prepayment value are your sector, your revenue, and your business profile. There are two fees involved in Invoice Financing: the service fee, and the discount fee. These are equivalent to the interest payments in other products, such as business loans.

A Factoring facility will generally operate on a disclosed basis, meaning that the company’s debtors are aware of the providers involvement. Factoring allows for an immediate injection of cash into the business, especially if you have a large amount of money tied up in invoices at the time of application. This will increase your cashflow, allowing you to run business more smoothly. Almost all sectors and industries can access Invoice Finance facilities as long as your company trades with business to business sales via invoices.

CID (Confidential Invoice Discounting) is another of the solutions within the Invoice Finance umbrella, used for solving cashflow issues for businesses who struggle with waiting out lengthy terms of payment. With an Invoice Discounting facility, it is completely confidential, which means your customers are not disclosed to the fact that a lender is involved in the payment process. You also retain control of your sales ledger, and can send out reminders for payment yourself. There are plenty of benefits to this type of facility, such as the client having no up front information explaining the fact that an Invoice Discounting partner is involved within the payment. Aside from the confidentiality of the facility, it runs very similarly to a Factoring facility. This type of finance is only available to larger companies, as the provider will not be as involved as in others facility.

CHOCCS is also a form of Invoice Finance. CHOCCS stands for Client Handles Own Credit Control Systems. The simple difference between a CHOCCS facility and other Invoice Finance products is that you will be in charge of chasing the payments owed to you on the invoices you have financed. It simply allows you to remain in complete management of your sales ledger, and your finances. A Confidential Invoice Discounting facility is a form of Invoice Finance where the customer is completely unaware a facility is in place. Factoringworks similarly, although it is fully disclosed that a provider will be involved in the process. The CHOCCS facility is hybrid of the two meaning the customer is aware of the lenders presence in the process, although no contact is made between them. The key benefits of this product is the ability to remain in consistent contact with your clients. With other facility this relationship may begin to break down, as the facility partner will be making the consistent contact chasing for payment. CHOCCS facilties are only available to more established businesses, as you must show proof to the CHOCCS provider that you have the capability to chase your own invoices in house.

Spot Factoring is another funding solution that allows businesses to get advanced payments against the value of an invoice. This product differs from the others as it specific to singular selected invoices. Most invoice finance facilities are whole turnover, where facilities of this kind give you the ability to pick and choose invoices you need advanced. Perhaps a client has lengthier terms of payment, and it impacts your cashflow, this scenario is perfect for a spot factoring facility. This type of facility can be more expensive per invoice than a more traditional form of Invoice Financing, although we can calculate this for you to ensure you won’t be overpaying for the facility, further helping you maintin your cash flow, and working capital balance.

Inject cash into your business to fund new assets, expand your business, or improve cashflow.

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