Bull's-eye
What was the exact situation? The entrepreneur in question had a lot of experience in wholesale clothing. Two years ago, he started a new business: the importing luxury, sporty winter jackets and ski and bike helmets. It turned out to be a hit, as the jackets and helmets were unstoppable. But his business success was so great that he was in danger of running out of goods to buy.
Indeed, his suppliers from Canada and Europe demanded payment before delivery of the products. Initially, the entrepreneur had been able to finance his trade thanks to a small credit he had taken out with his house bank, but over time, that credit was no longer adequate. While all the goods ordered by the importer from its suppliers have already been pre-sold to consumers, there are usually several weeks between the time the company receives the goods and the time they are delivered to consumers. Too long a period to bridge financially for this entrepreneur.
Banks? Chance-free mission!
Knock on regular banks' doors, you might think. But that is a hopeless mission, as they do not offer a solution for this. Traditional working capital financiers also did not yield; they thought the company was still too young and its annual turnover of less than €5 million too low.
That was when the winter coat importer, through one of our network partners, knocked on our door. Xolv Finance's specialists master the complete spectrum of financing solutions: from leasing of investment goods to the often complex financing of a business acquisition. But the core of our business is working capital financing for the entire primary business process: from purchasing and inventory to trade debtors.
Win-win situation
Fortunately, we were also able to prove our worth for this entrepreneur. We made sure that two specialised financiers were at the table within a few days, thinking along about the best solution. That turned out to be a factoring contract for the debtors and tailor-made transaction financing, which enabled timely payment of purchases. After the company delivers the goods, it immediately receives an advance payment of 90% of the invoice amount. With this, on the one hand, each time part of the transaction financing repaid and, on the other hand, the company has adequate liquidity to pay other operating expenses on time as well.
A win-win situation, therefore, which means that the company will be able to operate immediately, as well as secured appropriate funding for the coming seasons. So the winter coat importer will be warm during the coming Christmas season. Literally and figuratively.
Do you also want to have structural (more) liquidity to take advantage of your business opportunities? Through Xolv Finance we have various options for financing your working capital.
