In addition the business was applying to its bank for EFG funding of £40k. In our opinion a business that has had some trading difficulties is unlikely to be eligible for bank support even with the banking of the EFG scheme. However the customer didn’t realise that not only could we reschedule the repayments on his main press but we can also release any additional equity. And guess what based on the current trade valuation we can refinance the press, release an additional £50k and provide a monthly repayment no more than he is paying at the moment. Happy days. Well until the cash runs out.

The second enquiry we had was for a timber business importing wood from Eastern Europe. The business until recent years had been fully supported by a high street bank providing a small overdraft and an import finance facility. The business being under pressure from the bank to reduce its exposure came to us for alternative funding arrangements. We were able to introduce the business to an independent trade finance company and as yet we are still awaiting the outcome. Whilst alternative funding is never a guarantee there are alternatives to the banks and it is just a case of knowing who does what!

A number of these specialist invoice finance companies have a network of offices and associations spread around the world offering multi currency facilities and credit control. Obviously it is easier to obtain funding in developed countries however it may be possible to obtain funding in less developed parts of the world so long as your customer has a credit rating.  As with any factoring or invoice discounting product different companies are better in handling different sectors than others. Just because you go to your bank and they inform you  that it is not possible to factor foreign invoices it doesn’t mean it cannot be done via a specialist lesser known finance company.

A good independent finance broker will be able to introduce you to the most appropriate funders. Again it is important to be talking o two or possibly three finance companies so it doesn’t become a one horse race. However if you invite every tom dick and Harry of a finance company non of them will take you seriously an in our experience you end up getting a worse deal.

XL Business Finance has been helping business for over 10 years find the most appropriate funding partner. Give us a call today to see how we can help your business. Go on you know you want to!

This type of trade finance facility isn’t readily available from high street banks. A bank will provide a trade facility for a business to import goods however any facility provided will be done so against the strength of the business and profitability . In many circumstances a bank will also want additional security such as a charge over property. A bank type trade facility will only enable the strongest of businesses to obtain funding.

However a specialist trade finance company will proive a seamless facility for most types of businesses to new starts to businesses which maybe have had some trading difficulties. On providing evidence that the goods have been presold funding can be obtained to import these goods. Obviously the finance company will take title during the process. On delivery an invoice will raised to the end user. Either the invoice is paid in full and the trade facility is repaid or the invoice is discounted via a factoring or invoice discounting facility enabling the end user to sell the goods before having to pay for them. Assuming there is more than 20% profit in the transaction the factoring facility or invoice discounting facility will pay 80% of the invoice and hence again pay the trade facility in full.

For example if a wholesaler is importing televisions but doesn’t have the cash to buy the televisions from the foreign supplier and provided the wholesaler has orders for the TVs in the UK a complete funding package will be available. An import facility is provided for the wholesaler to import the TVs. As soon as they hit the UK and are dlivered to the end customer an invoice is raised as per usual providing however many days credit. The wholesaler will then factor that invoice with the same finance company to repay the trade element of the facility providing a dovetailed finance solution.

This is slightly different from how the banks work that don’t look to be repaid from a factoring or invoice discounting facility but from the sale of the goods at some point in the future. The banks way of doing things is slightly more risky and as such they will look to support business that are only profitable, with a strong trading history and a proven track record.

The dovetailed solution poses a less of a risk to a finance company as they keep control of the transaction from start to finish. Although these facilities may be more expensive than a bank they enable businesses that have no track record or are even new starts or have very little cash to obtain import finance.