Stock Finance can be an ideal option for Importers that have reached their limit with their bank and need “top-up” funding.
This well established business imports and sells animal feed to Irish farmers . With their busy season kicking off in March, they were keen to negotiate the best possible price with suppliers. They needed working capital to negotiate substantial discounts for cash payments to key suppliers, however they had hit their limit with the bank.
With a customer base of farmers taking lengthy credit terms, the business wasn’t suitable for Invoice Discounting, so they couldn’t release working capital from the debtors ledger. However they had a very strong balance sheet, good track record and relatively few bad debts.
While their bank was very supportive, the business was at their limit and didn’t have any more security to offer the bank.
We arranged a Stock Finance facility for the business to provide additional “top-up” finance. The specialist lender obtained a credit limit of €350K on the business, based on the strength of the company balance sheet. The lender provided Stock Finance facilities to the company, secured by an insured Bill of Exchange.
This additional finance enabled the business owner to negotiate extremely keen rates with his key suppliers at the start of the season. Importantly, the Stock Finance didn’t impact on any existing funding arrangements.
By using this flexible funding, the business owner simply maximised his working capital which allowed him to negotiate preferential rates with suppliers and increase his profit margins.