- 18 May 2016
- Posted by: Lucinda
- Categories: Invoice Discounting, non-bank lender, Success Story, working capital finance
“When our bank couldn’t offer us Invoice Discounting, we didn’t realise there were other lenders willing to support us”.
When the owners of a start-up confectionery business went to their bank for Invoice Discounting, it never occurred to them that they wouldn’t meet the banks’ lending criteria. Although they were only trading six months, they had secured a contract to supply to a major buying group and there was strong interest from 2 supermarket chains. With 15 years experience in the industry, they had invested heavily in the new venture. They needed working capital to fund the day-to-day business and thought Invoice Discounting would be a perfect solution. Their bank however declined their application because of debtor concentration, low turnover and lack of trading history.
When we met the promoters we were impressed by their commitment to the business, industry experience and strong pipeline of quality customers. Although there was a major debtor, they were confident of winning other blue-chip accounts within months. We introduced a flexible non-bank lender who was willing to support the new-start business with a €300K Confidential Invoice Discounting facility. What’s more, the funder was happy to advance a prepayment of 80% against invoices, even though their key customer represented over 70% of the ledger.