1. IMPORTER – TRADE FINANCE?
The customer, introduced by a trade financier was involved in importing foodstuffs from the States – inevitably they need to bridge the funding gap between dockside USA and being paid by their customer.
A good solid business with 5 large, reliable key clients – on the face of it this looked an obvious trade finance deal, so why had they passed it to us?
There were 2 hurdles to conventional trade finance:
- Short shelf-life/perishable nature of goods.
- Despite have good clients & repeat orders, the order was never placed until the goods were in the UK.
Based on solid trading history and evidence of continuing orders, we were able to put in place a ‘nearly trade finance facility, whereby our funder paid the supplier without requiring charges over goods or contracts.
Helping a customer who only just missed mainstream criteria.
2. STEPPING INTO MANUFACTURING:
The customer was well established as a distributor of giftware. They also distributed their own brand which was manufactured on their behalf by a UK company.
Having undertaken much due diligence, they recognised that they could do their own manufacturing and had gone to the extent of negotiating with their existing supplier a ‘parallel manufacturing’ facility. (In short, out client would build a line alongside the existing supplier’s facility). This overcame many possible hurdles, including compliance, H & S and space issues.
The bank, who introduced them, liked the business as a whole but were stuck as historic accounts reflected only commission earning so didn’t justify the expenditure indicated. Also they were unable to fund equipment not situated on the customer’s own premises.
We introduced a funder who understood the business model & the equipment (which was imported), and was able to fund the entire facility.
A case where the customer’s shrewd planning alienated the banks.