Cash flow problems? Consider trade finance
Following on from last month’s note on trade finance we received a couple of interesting enquiries illustrating how little knowledge in the broker market there seems to be about this type of finance. The first company had only been trading for a few months with an innovative product that they were selling to a Government body. They were forecasting sales of £10m per annum if they could fund the purchase of the product from the manufacturer and whilst they had been introduced to a factoring company this type of funding on it’s own wouldn’t have been of any help if they couldn’t fund the purchase of the product to sell on.
We were able to introduce the company to one of the more innovative high street banks who were able to offer a funding package that would enable them to fund the purchase of the product as well as it’s later sale.
A week later we were approached by another company who imported electrical equipment from the Far East but despite having the benefit of a factoring facility for the last two years was still struggling with his cash flow as he had to pay for all of his goods prior to their shipment from China. His factoring company must have known what type of finance was really needed but neglected to inform him that trade finance would be the solution to his problems.
Fortunately we were able to source a purchase finance facility for them to run alongside their existing factoring facility.