TFG are Filling the Trade Finance Market With Bubbles
Trade Finance Global helps structure finance for trading companies; increasing their trade lines and helping them grow quicker through stock and trade finance, without relying on tied up working capital in the business. TFG recently helped finance a hot tub company – here’s how…
TFG were recently presented with a challenge. Could we thread stocking finance into the hot tub market?
TFG were introduced to a company that had grown consistently through hard work, re-investment in growth and a small overdraft. Sales (even in the winter) were rapidly increasing with demand for tubs and ancillary products being strong throughout Europe.
The issue was financing this demand. The current bank had only offered a small overdraft, so by navigating all assets security; a new lender was able to bring in a stocking facility.
There were many issues initially faced including getting comfortable with the installation of the tubs for consumer purchasers and this being included in some of the pricing listed. By taking time to understand the sales cycles, purchasing terms and following this all the way through to installation, it allowed a scalable stocking facility to be used. This meant that the company could purchase from US and Canadian suppliers earlier, stock in higher volumes and expand to new sales avenues.
How did it work?
1 Borrower agrees to purchase the hot tubs from the Supplier
2 Borrower agrees terms with funder and funder pays the Supplier upon shipment of hot tubs
3 Goods are shipped to a warehouse and stored there
4 Goods are sold to customers and customer pays Borrower
5 Borrower re-pays funder on due date
The company could not believe the ease of the facility and the possibility to purchase all the way from supply – along with providing a higher level of supplier confidence and lower sales prices.
We hope the market jets off and gets hotter!