We are able to source facilities for UK SMEs delivering Goods or Services to their Customers. Many such SMEs have to buy these Goods or Services, or components of them, to enable them to make their delivery. They might be buying them in Chichester or China, Manchester or Malaysia, Uttoxeter or USA, but they have to buy them. To buy such Goods or Services they need spare funds, or to offer their supplier an acceptable covenant to get credit. If they cannot offer the supplier those funds or covenant we can often help. Thus Trade Finance merely means the circumstances where we buy Goods or Services to enable the SME, our Client, to deliver his product.

What types of transactions do we cover?

We are able to source funds for transactions; trade finance is not a  loan to the Client to fund their own transactions, or for any other purpose. That is what other lenders might do with an overdraft or loan, if the Client can obtain such finance. For a trade finance provider, the transaction is the security so they are “hands-on”, and the funder haa to be confident that the transaction will be successful and they will get their money back. Most lenders do not have firm rules about what constitutes a fundable transaction. With many years of experience trade funders can quickly consider each proposal, hopefully to suggest a format to achieve the Client’s aims. Trade finance Clients may have any of the following characteristics:

• They may be selling Goods or Services. (Fundable Services include ship chartering and phone calls.)
• They may be start-ups, restarts, going into a CVA, coming out of a CVA, nearly insolvent (but stable) or well established and profitable. The key common feature is always that they have opportunities, and do not have the funds or covenant to buy the items to deliver the Goods or Services for which they have orders.
• If the Client’s current company might not be financially stable we can sometimes introduce other ways that the transactions can be funded such as our standard “Two-Company Structure”. This can be applicable to both trade finance and contractual debt finance.
• Transactions will normally have a gross margin between 20% and 70%, but we do fund transactions in which the gross margin is only about 5%.
• Clients may be trading, assembling, or manufacturing. Most funders in this sector do buy components for manufacturers with a track record.
• They may be selling in UK or overseas.
• They may be buying in UK or elsewhere.
• It is not essential that the Goods ever touch UK shores.
• They may be selling for payment on delivery, or offering secure credit.
• They may use us to buy some or all of their purchases. The funder traces the Goods through to the related sales invoices.
• It is not always essential that all Goods are presold before a lender can commit to buy. The concern will to be confident they shall get their money back from sale proceeds.