- Business Type: UK-based manufacturer
- Challenge: Transitioning from domestic manufacturing to an import/export model while addressing working capital needs
- Facility Type: Trade Finance Line: Circa £800,000, Invoice Finance Line: Circa £700,000
A reputable UK manufacturer approached Enness seeking a financial solution to facilitate a shift in their business model. After a considerable time of producing goods domestically and exporting to Europe and the US, the company faced declining profit margins due to increased competition and rising production costs. The client transitioned to importing goods from overseas manufacturers to remain competitive, which required significant changes to their working capital strategy.
The primary challenge lay in the cash flow gap caused by their new operational model:
- Upfront Costs: Placing orders with international suppliers requires substantial upfront payments.
- Delayed Revenue: A 90-day lead time for manufacturing, shipping, and delivery meant the company wouldn’t see revenue until the goods were sold.
Without sufficient cash reserves to bridge the gap, the client needed a structured financial solution to maintain operations during this transition. Enness collaborated with a specialist trade finance lender to design a bespoke working capital solution. The dual facility included:
- Trade Finance Line: A revolving credit facility that allowed the client to fund large supplier orders without depleting their cash reserves. Interest rolled until the goods were sold, ensuring repayment could be made from revenue generated by the sales.
- Invoice Finance Line: Enabled the client to advance funds against issued invoices as soon as goods were shipped to customers. These funds were used to repay the trade finance facility, minimising interest costs and further optimising the working capital cycle.
This structured approach ensured the client could transition smoothly to their new import/export model, maintaining operational cash flow and enabling strategic investments in their evolving business.
Enness leverages deep expertise in trade and invoice finance to deliver tailored solutions for businesses undergoing significant operational changes. Our access to a broad network of lenders allows us to identify the best possible terms and structures to meet unique business needs.
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