Supplier Finance: An Untapped Working Capital Solution

Working capital is vital to businesses right now. An untapped source of working capital is supplier finance. This is when suppliers are paid early or within agreed terms by the funder, who in turn gives a business credit of up to 120 days from invoice date.

Bathgate’s Ian Adams recently brokered a £1.25 million supplier finance deal, for a roofing company carrying out large scale projects nationwide. The increased working capital was required to accommodate both the continued expansion of the business and longer payment terms agreed on key contracts.

Speaking of the deal, Ian said: “The client already had a high value bank overdraft. The bank who introduced the business was willing to discuss a waiver on agreed customers, so Bathgate discussed both selected invoice finance and supplier finance as solutions and introduced funders. Their sector limited options, but our expertise ensured funders were identified for both solutions.

“While both options suggested were approved, the client preferred the supplier finance solution, which provided the ability for them to help their suppliers receive early payments, as well as solving their working capital needs.

“Supplier finance is a simple and relatively fast solution, but it is an underutilised one. This is possibly due to the requirement for a credit insured limit to be agreed on the business, but there is also a lack of awareness around the solution.”

To discuss supplier finance with Ian, please contact  ian@bathgatebf.co.uk or call  078 8018 6846