- No need to use your cash to pay suppliers – The lender pays your suppliers directly ensuring fast payment of their invoices.
- Extend trade credit days – You retain the relationship with your supplier but extend your credit terms with them without affecting this relationship.
- Pay suppliers early – Pay early and negotiate early repayment discounts to improve your margin.
- Flexible pay as you use facility – A facility designed to be used as and when you need with no contracts to tie you in.
Supply Chain Finance Experts
Our experienced trade finance team work with specialist Supply Chain Finance Lenders within Trade Finance sector. This enables us to be able to quickly structure and set up straightforward trade finance facilities, so that our clients do not have to turn down orders and any potentially lucrative relationships that may follow. Whether you are importing or exporting goods, contact a member of our trade finance team and we will be happy to talk through your requirements and provide you with assistance.
How It Works
- The Lender agrees a credit limit for the business – this is largely based on the tangible net worth of the business and the insurable limit they can obtain against the business.
- You agree which suppliers you wish to include in the facility.
- Together you and the Lender introduce the programme to your nominated suppliers.
- You send confirmation of the suppliers invoices to the Lender and they issue a promissory note.
- You authorise the promissory note and payment is made to the supplier.
- Repayment is made on the agreed repayment date.
Benefits to You
- Improved Working Capital – The Lender pays your suppliers directly leaving you with the cash to grow your business.
- No formal security– Only a promissory note is required and so the facility shouldn’t interfere with other funding arrangements.
- Higher lever of funding – Facilities work along side other funding arrangements which will increase the level of working capital you have.
- Extend your payment terms – Increase your payment terms up to 120 days without affecting your relationship with your suppliers.
Benefits to your Supplier
- Improved Working Capital – Faster payments of their invoices – within 4 days of raising them- will increase their cashflow.
- Flexibility– Suppliers can opt in and opt out on a per invoice basis which means they are not contracted or tied in, using the facility if and when they want to.
- No security – Funding is provided against your company meaning the security is the strength and creditworthiness of your business.
- Decrease concentration risks – Your supplier can sell more to you as their credit risk is decreased.
“Having a way to pay our suppliers early without using our own cash and still managing to get an early payment discount is a huge benefit for us. We work with Oakmead Finance more as partner than a customer and the team’s expertise and knowledge of the market is undoubtedly a huge advantage for us.”
Case Study 1
We were approached by the accountant of a growing roofing contractor.
They were seeking additional cash flow to support their growth and specifically they were looking at ways to generate the cash to buy more stock to fulfil their sales orders.
Following an in-depth initial meeting with the head of our trade finance team, we were able to quickly identify possible providers. We then negotiated and ultimately secured a £500k Supply cCain Finance solution.
This enabled our client to procure their product and pay their suppliers early, securing an healthy early payment discount in the process which has helped improved their margins and actually absorb the cost of the Supply Chain Finance facility.
Following the initial funding, the client is continuing to generate new orders, with Oakmead Finance now acting as their preferred broker and adviser.
Their dedicated account manager knows and understands the business, and is able to quickly secure the finance for them. This is allowing them to enjoy rapid growth, whilst being safe in the knowledge that they have the cash available to fund all new confirmed purchase orders.
Case Study 2
We were approached by a predominantly UK based company which sold chemicals used in the manufacture of paints. They were seeking expansion into lucrative new markets in the Far East and required a $5m facility to fulfil newly generated orders.
However, the business’ existing bankers were unwilling to lend further to the business, because of an internally imposed exposure limit.
After an initial meeting our experienced team quickly identified the best way to structure the transaction was via a Supply Chain Finance facility. We then approached a select number of specialist lenders, who not only provided funding secured by a credit insurance facility but also, given our client’s inexperience with international trade, took control of the management of the supply chain.
The Supply Chain Finance Lender paid for the purchase of the chemicals directly to the supplier in Europe and then set an agreed repayment date to coincide with their payment form their debtor.
Following a successful trade, the client is continuing to expand across the Far East. We have also allocated a dedicated account manager within Oakmead Finance who understands the business and their growth strategy. This makes it quicker and easier to help fund the company’s global expansion.
“Oakmead Finance’s experienced trade finance team worked seamlessly with us and the finance provider to agree a mutually acceptable facility, which has allowed us the expand internationally. Having a dedicated account manager has given us the confidence that we are dealing with someone which truly understands us and our goals. They are more a trusted business partner, than a service provider.”
Oakmead Finance Ltd is a company registered in England & Wales with company number 09478864. The registered office address is Lynwood House, Crofton Road, Orpington, BR6 8QE
Supply Chain Finance facilities are not regulated by the Financial Conduct Authority.