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Case study: Funding international growth with trade finance

Global Sports Brand

Mike Cass in case study, trade finance
Aug 31

Turnover: $30m globally; £500k in the UK
Requirement:  £250,000
Sector: Sporting Goods
Location:    South East England
Incorporated: 2010

 

The founder, owner and Managing Director of an up-and-coming global sporting goods brand approached Capitalise - initially through the platform’s Live Chat function - looking for help to identify lenders that could put together a suitable trade finance facility to ensure their UK company could be self sufficient when bringing in stock and funding large orders in the UK and Europe. Prior to this, the UK company had been reliant on help from the parent company when shipping goods from across the world. The overall business had a very compelling growth story and trajectory which made finding interested lenders a walk (or should I say run) in the park.                                                                                                           .

What was the challenge?

What was needed here was a lender who would increase the company’s availability of funds through a trade finance facility that would enable them to fulfil large orders. Smaller orders could be funded through their operating cash flow and their existing invoice finance facility, but larger orders were increasingly being placed as UK sales grew - this was viewed by the business’ management as an issue that would replicate itself time and again if not remedied. This was seen as a strategic move and the lender they viewed as a partner who would have to be competitive - both with their price point and the level of client care and support they could provide the small UK-based team. Another challenge was the geography of their main suppliers - the vast majority of which are based in India - which may well have fallen outside of some funders’ country risk appetite. However, as the business already had a AUD $4m trade finance facility in place for their parent company, they believed the UK company should have the same options and flexibility available to them - and it was down to Capitalise to secure that.

 

Result

We were able to organise a meeting with a lender whose offer of finance and approach to relationship building was enough to secure both the trade finance and on-going invoice finance requirements of the business. The trade finance facility would be deployed whenever a larger order was placed by a UK client, in order to pay their suppliers up front, and the invoice finance facility would be used on an ad-hoc basis in order to provide a higher availability of funds for everyday operating cash-flow - thereby greatly increasing the comfort by which the company could go about expanding its operations in the UK.

 

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