TRADE FINANCE SOLUTIONS
Stock Finance Solutions For Your Business
Stock finance is a mechanism which releases working capital from stock such as finished goods or raw materials, which works by lenders purchasing stock from a seller on behalf of the buyer. It is a type of funding whereby the borrower uses a lender’s funds in order to purchase product to sell. This is usually stock that will be sold on. A reason that this may be used instead of trade finance is that as there will not be confirmed purchase orders, buffer stock is needed or stock will be sold to customers where trade finance is not applicable.
Please see below for some of the possible solutions
THE STOCK
Using the Goods That You Are Buying As Security to Raise Finance
These facilities typically will take the value of the stock being bought as security for the facility.  Ideally the buyer will have a decent sales margin which increases the value of the security.  With all such facilities the lenders will require the client to finance at least 20% of the stock.  The client will need to demonstrate experience.  The products should be durable, from a reputable seller and have a secondary market.
BALANCE SHEET
Using the Strength of Your Balance Sheet to Raise Finance
For more established businesses with a good track record, funding could be made against the strength of the balance sheet. Â The lender may take security over a number of assets including stock. Â The size of the facility will be in proportion to the lenders assessment of the value of their security.
With stronger clients the facility may be totally unsecured.
Funding could be by way of a stock loan, revolving credit facility , overdraft or a top up to another facility such as an invoice finance facility.
DIRECTORS GUARANTEES
Flexible Funding Secured By Directors Guarantees
Stock funding to UK and International companies to enable them to buy, and sell, more of their products.
This is achieved by providing clients with a funding limit, whereby they can purchase goods up to this limit at their own discretion, without requiring recourse to the funder on individual purchases.
Funding is paid either to suppliers on a pro-forma basis for the goods, or to the client, which they then use to buy goods from their suppliers themselves.
Stock funding solutions tend to work on a revolving basis, so clients can repay facilities without penalty at any time, and then redraw when they want to buy more stock. Usually you only pay for the service when you are using the funds.
Stock purchase finance and stock loan finance is available for all types of goods across all sectors, including goods that are pre-sold, speculative, component parts or raw materials. It is also possible to fund hazardous or regulated goods, such as fireworks or alcohol, and complex items such as equipment which needs to be bought and installed before being refinanced with an asset finance provider.
Stock funding solutions can be the key that unlocks the growth in our client’s businesses.
