 |
 |
Purchase Finance
Stock or Purchase Finance is provided by specialist funders, it is ideal for wholesalers, importers, exporters and manufactures as these businesses rely on delivering goods to the customer promptly. Purchase Finance allows businesses to acquire goods on credit and sometimes businesses can acquire more goods, beyond existing credit lines.
This type of finance can be an invaluable source of cash funding and it can be confidential: your bank as well as customers need not know about it.
How does it work?
You negotiate terms of trade and delivery with your supplier. Minimum stock purchase is £20,000. Our funder would then pay the supplier in line with your agreed terms. This can be a payment made up front before goods are released if it is required.
Our funder will then give you 120 days (4 months credit) from payment of supplier, before you have to pay them back. So for example, if your supplier gives 60 days to our funder, you won't have to pay the funder for 180 days!
By which time you may well have turned the stock around and invoiced the product to your customer. In many cases (especially if you use the facility in conjunction with an Invoice Discounting facility) you will be able to make profit without parting with any cash !!
What are the benefits?
- Buy stock when it suits you
- Allows unscheduled orders to be paid for
- Seasonal stock requirements can be funded
- Better terms and discounts can be negotiated
- Can be used in addition to other borrowing facilities
- Allows for opportunistic purchases
- Typically no security or directors guarantees required
- No legal fees to pay
- No annual renewal fees
How much does it cost?
-
You pay for funds in use, typically at 1% per month, but this can often be offset by supplier discounts received for early payment.
What type of companies qualify?
-
Most industries and most goods (other than perishable stock) are suitable. Minimum criteria is as follows:
- Established at least 3 years
- Annual Turnover in excess of £3million
- Net Profit in excess of £50,000
- Shareholders Funds in excess of £50,000
- More than 10 Employees
Use the facility as a sales aid for your products
If your customers are requesting extended credit terms from you, then this product may be suitable for them.
You would then be able to offer an early settlement discount for early payment, your customer would get their extended credit terms and you would eliminate the credit risk.
How do I find out more?
Sterling Capital Reserve Ltd
Sterling House
10 Wheatcroft Business Park
Landmere Lane, Edwalton
Nottingham NG12 4DG
Tel: 0115 984 9800
Fax: 0115 921 5550
Map and Directions to our Office
