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Don’t Believe The Gloom

As we head into the Christmas break, you’d be forgiven for thinking that there is no point coming back into the office in the New Year, such is the relentlessly gloomy picture of the UK economy painted in the popular media.

Here we see things a little differently. Yes, it’s got harder for UK businesses, but that means that the better, leaner operators now have a chance to shine.

We have a number of funders that of provide revolving Trade Finance to UK SME’s.

In our world, there are a number of positives occurring right now that you may not have heard about in the general press.

This includes;

  • The fact that container prices are down drastically. A standard shipping container moved trans-ocean into the UK is now well under £4,000 and falling. We are hearing of container prices as low as £2,000 for some routes. This is down from a high of nearly £15,000 at the height of the pandemic.

  • The Sterling to US dollar exchange rate has recovered not just to pre “mini budget” levels, but even beyond that. It’s currently at a 6-month high.

  • A change in zero-covid policy in China means that Chinese factories are getting back to work and are under cashflow pressure from the prolonged shut down. This means UK importers are able to secure discounts for payment of goods up front in cash.

All these factors are cause for optimism with UK importers, but they rely on two things.

Firstly, the UK importer needs to have customers in mind for the goods that they are purchasing, now is not the time to have speculative stock languishing on shelves for months on end. Secondly, the importer needs to have the cash on hand to pay for the goods upfront.

Providing a UK importer, reseller, or manufacturer, has a track record of selling goods to their customers, funders consider the first box ticked. In the current climate the goods that we see moving quickest are consumer value-oriented goods, and goods that are considered non-cyclical, such as building products, foodstuffs, alcohol, used cars etc… Funding can be sourced for the purchase of all these items and many more on behalf of our clients, ticking the second box for UK SME’s. The cash is provided by the funder for the payments to be made to suppliers.

We are finding that the appetite for unique stock funding products is increasing as traditional working capital lines, such as term loans, are coming under pressure as institutional funders struggle with rising operating costs and interest rate uncertainty.

Such funding products are different as they revolve in line with the transaction cycle. This is usually no more than 90 days and often less than 60 days. The funding is live only for as long as it is needed. Clients pay suppliers for goods, those goods are transported/worked/repackaged and sold, and the stock facility is repaid ready to go again.

Multiple purchases can be made at the same time up to an agreed limit, and the facility can be paid down whenever the client chooses.

Remember these facilities often have no non-utilisation fees. Only active funds out attract interest or charges. This allows clients to only use the facility when they need to, to increase turnover, maximise profitablity and it allows complete control of costs.

If you are a business that needs to buy stock or an introducer working with with UK SME’s, then now is the time to be contacting us to see how we can help you with your funding requirements whether it is stock finance, invoice finance, trade finance, or indeed a full range of other commercial finance solutions.

Please call us on 07941 620905 or send an email to .


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