Flexible Funding: The Competitive Advantage

What do you do to fund that once in a life time order? Where do you access cash to exploit sales opportunities? What can give you an advantage over your competitors?

It isn’t always reputation, expertise or even entrepreneurial drive that determines why one business thrives whilst others struggle. Ultimately it can simply be that one business has access to cash to and one doesn’t.

When a business needs access to cash to fund growth, fulfil orders or even to pay for the increasing costs of day to day business traditional bank lending is the first port of call.

However, the flexibility or speed of decision a modern business requires cannot always be offered by a traditional lender. In the dynamic world of modern business there isn’t time to wait on the cogs of a bank’s decision making process to turn. A business with the ability to make decisions without necessary worrying about whether the cash is available to support them has a distinct competitive advantage.

There are many different financing options available to businesses over and above those traditional lending products. Identifying where most of the value of a business is tied up and then knowing how best to unlock it is key to giving this advantage.

Front end working capital solutions include:

1. Purchase Order Finance – Direct payments to suppliers against purchase orders worldwide for goods, covering up to 100% of the purchase price plus duty and logistics.

2. Letters of Credit – Payment guarantees covering up to 100% of the purchase price from suppliers, subject to satisfying delivery and other conditions.

3. Stock Loans – Release valuable working capital locked up in your warehouse up to 100% of the stock value.

4. Supply Chain Finance – Facilities to fund up to 100% of a trading company’s purchases from suppliers worldwide, structured as supplier payments or reverse factoring processed through a proprietary online platform.

Back end working capital solutions include:

1. Invoice Finance facilities – These are revolving facilities funding up to 90% of your invoice value releasing cash tied up in your sales ledger and all ongoing sales. Facilities can be on a disclosed or on a confidential basis.

2. Asset Based Lending facilities – Facilities release up to 70% of the cost value of warehoused stock on an on-going basis. These are designed to complement invoice finance facilities to maximise the amount of working capital that can be provided.

3. Asset Refinance facilities – A stand alone, one off, facility designed to provide additional working capital by releasing cash against plant and machinery. This an option for the quick release of funds which advances up to 80% of the asset’s value whether the asset is owned outright or currently under an existing finance agreement.

4. Sale and HP Back – With this product the asset is purchased by the lender at an agreed value and financed back to you over a fixed period with repayments matching the income stream generated by the asset.

Considering the range of financing options available exploring the huge range of lenders outside the traditional banks is key to getting the best value funding in form that suits a business’s unique needs.

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