In addition, companies that have their goods produced in, for example, the Far East face an additional challenge in selling or distributing these goods in Western Europe.
Procurement finance
In the latter group, the credit requirement already when the production order is placed with the supplier. The latter often wants full or partial payment, sometimes a guarantee. Purchase or transaction financing is no longer a matter of course with banks since the financial crisis. In many cases, therefore, there is an imbalance in the relationship with the traditional financier.
To get certainty of purchase and payment, the producer often uses documentary collection, e.g. "Cash Against Documents". This gives him a high degree of security. Once the importer has fulfilled his payment obligations, he receives the documents and the purchase or transaction financing turns into stock financing. Once the goods are cleared and delivered and invoiced in the following weeks, debtor financing replaces stock financing.
Order to cash
Ideally, the entire financing process should be a fluid one. This requires a good understanding of the entire order-to-cash process, from building up the order book, the procurement and production process, to delivering the goods to the end customer. Both the financing requirement (at different points in time) and the risks in this process, should be well understood.
For structuring conclusive financing, which can create a secure financial future, Xolv has excellent options. The traditional route to the bank, in our view, is not always the better one. It often ties up collateral, terms and conditions and creates a great dependence on the bank, including its factoring and/or leasing subsidiary.
Optimal funding mix
Xolv wants to guarantee your independence as much as possible. We therefore select and combine specialised financiers and financing options with the aim of putting together an optimal financing mix. This generally leads to less vulnerability and makes the interchangeability of the various components of the financing greater compared to a bank overdraft facility.
An additional advantage is that good savings can be made on the cost of financing, currency risks and document traffic.
Solution for wholesale sporting goods - FGHS
In early 2016, Xolv entered into a partnership with the FGHS, the trade association of manufacturers and wholesalers of sporting goods and sportswear. Working capital financing also plays a vital role among FGHS members.
Xolv has put together a special arrangement for FGHS members to optimise the order-to-cash process and structure a predictable financial future. This arrangement contains extremely competitive terms and conditions. These include order coverage, credit insurance, purchase and transaction financing, stock and debtor financing and currency risk hedging.
Do you also want to operate less dependent on your bank and have a predictable financial future? Then get in touch with Xolv, David Prommersberger - david@xolv.nl
