Trade and Stock Finance

Reduce cash flow pressure

It’s understandable that cash flow can be stretched at times within a business, especially when you’re gaining increased pressure to extend debtor terms to win a contract or simply having to deal with longer production times. Whatever the issue, a business needs to have available cash flow in order to either purchase raw materials or stock. It’s essential that the cash flow cycle continues to rotate, moving product through to sales as quickly as possible to meet demand.

When it comes to ordering stock from overseas, this can yet add more pressure to an already tight cash flow situation. Delivery in some instances can be up to eight weeks if not longer from some countries once the manufacture and transportation has been complete. This is ok if you pay on delivery, but a lot of businesses are not lucky enough to have these types of supplier terms and more often than not have to pay in full, either on order or shipment of goods. This ties up cash flow that a business could better use in its day to day operations.

With these situations in mind we work closely with our lenders to gain facilities that are readily available to support your purchase and stock requirements. This could be the perfect solution to support your growth ambitions.

Interest rates

If your business is approved for lending purposes, the finance may incur an interest rate in line with your business risk profile. The business profile is categorised in three different tiers, high, medium and low risk. The risk calculation will be based on the assessment made by the financier during their application and approval process. You should expect that the higher the risk, the higher the cost of the finance.

The assessment will consider all aspects, such as the finance term, business profitability, and length of trading in the current sector. One of the best indicators of what interest rate you may pay for the finance is to review your business credit rating. If your credit history is poor then you’re likely to pay higher rates of interest. The stronger the credit rating and a strong financial standing should see your business profile improve which means you should see a reduction in the interest rates payable.