Working Capital Solutions
Over the last 15-years there has been a shift away from traditional overdraft lending to UK businesses. During this period banks and financiers have become keen to secure their funding against specific assets owned by their customers.
This has led to Invoice Finance funding being seen as a positive cash-flow tool for both young and established businesses, rather than the historic “lender of the last resort” status it previously enjoyed. Greater funding is typically provided from an Invoice Finance facility compared to an overdraft (75-90% of debts rather than 30-40%). This is also coupled with a reduced requirement for security with fewer property backed personal guarantees being sought.
Banks are now keen to fund the entire trade cycle of their clients as follows:
• Imported goods from suppliers – via trade finance facilities (import loans or letters of credit)
• Inventory – revolving facility linked to the value of raw materials, finished goods or work in progress
• Invoice Finance – up to 90% funding against outstanding debtor balances
To complete the suite of Asset Based Lending (‘ABL’), funders will also provide term lending against:
• Plant & Machinery – term lending provided against company owned assets
• Property – term lending against commercial premises for up to 20-years
At Bespoke we are experts in the sourcing and structuring of such facilities and work with our clients to ensure that such facilities continue to evolve with their needs. We also have experience in sourcing and structuring Enterprise Finance Guarantee (‘EFG’) scheme lending which is a DTI-backed scheme providing lending to SMEs without any tangible assets to pledge.