Annual Sales Circa £4m
They require working capital funding to pay suppliers. All the goods they sell are manufactured in Hong Kong. They require Import Finance to pay the HK Supplier at point of shipment. They have paid 25% deposit to the supplier before they start making the goods. Balance of 75% due at shipment. All the goods that are ordered from the HK supplier are pre-sold goods to their end buyers, which include M&S. They have Purchase Orders from M&S and other end buyers.
How Convenient Capital Assists:
- Upon the request for funding from our above client, we evaluate the POs from M&S and other end buyers and make a credit assessment on them—their ability to pay for the goods when they are delivered to them by our client, the importer.
- We know there is a long-term relationship with the Supplier—this is important—if there was not, we would need to carry out very comprehensive Due Diligence on the Supplier, even to the extent of having our agent/representative visit the supplier. We do not like new Buyer/Supplier relationships; it’s a lot riskier. We prefer a one-year minimum relationship and three successful trades.
- When the goods are ready to ship, the Bill of Lading and all shipping documents are sent to us by the supplier/shipping company. We verify their authenticity. If okay, we pay the supplier the balance due.
- The goods arrive in the UK. They are checked by our client (the importer), and relevant taxes and duties are paid. The goods are then delivered to end buyers, including M&S. A Sales Invoice is raised for the goods and immediately assigned to Convenient Capital.
- 30-90 days later, the end buyers pay the sales invoice to Convenient Capital. We deduct the advance we made to the Supplier, plus our charges and fees, and remit the balance to our client.
Another successful transaction concluded.
