Stock Finance has been developed by Creative Capital to allow our customers to purchase stock they otherwise would not be able to afford.
This may be down to the sheer volume of stock being purchased, due to underlying cash flow problems, or simply because they are a new start up business. Many of our clients are able to identify good opportunities for growth, but cannot afford the upfront costs associated with this. Creative Capitals’ Stock Finance facilities allow our clients to secure the stock needed for growth.
The process is very simple. Creative Capital will enter into a 12 month agreement with our clients, and allow access to an agreed credit facility. Typically this ranges from £25,000 to £250,000. Our client then identifies the stock they wish to purchase and agrees terms as normal. Creative Capital will then purchase the stock in our name, on our clients’ behalf. We take title of the goods, and they are shipped in our name. As soon as they arrive, Creative Capital settles any VAT, duty and freight which is applicable. We will pay up to 100% of the landed cost. Goods are then delivered typically to one of our warehouse partners, or sometimes to our clients’ premises. We will then release the goods to order as and when they are sold, with the facility being paid down by each sale.
The cost of funding is calculated from the date Creative Capital release funds, to the day of repayment. Traditionally, we are paid as and when the stock is sold, although as with any of our facilities, our clients are free to repay us early should their cash flow allow. Ideally our facility and any fees will be paid off with a certain amount of the stock remaining in the warehouse. We can then transfer the ownership of the remaining stock to our client. Each deal and transaction must be looked at on its own merits. Repayment schedules can vary widely depending on various factors. These can include value of stock, estimated sale time, profit margins, cash flow requirements, growth plans and more.
As with all products provided by Creative Capital, flexibility and clarity is key. All pricing and repayment schedules will be agreed in advance, with no hidden fees. Facilities are always priced and structured according to their own merits. However, if we need to amend a facility part way through, we are always open to discussing this with our clients.
Security comes in the form of a personal guarantee from all company directors and shareholders, as well as a debenture. We also look in detail at the deal itself – what is being bought and sold, what’s the margin, what is our clients’ background and their experience in selling the goods.
Stock Finance can be used by companies in most sectors who wish to maximise opportunities for growth. Clients include resellers of lighting, clothing, electrical goods and souvenirs. Stock Finance allows our clients to maximise their growth potential, without being hamstrung by restrictive cash flow.
To discuss how Creative Capital can you grow your business, get in touch today.
You are free to use the facility as little or as often as you need to, as long as you are trading within the agreed facility limit.
A stock finance facility is secured through the means of a debenture which give Creative Capital title over the stock owned by our client, as well as unsupported personal guarantees from all company directors.
Creative Capital will look providing Stock Finance facilities of typically £25,000 to £250,000. Larger facilities can be considered, depending on the deal.
The stock remains the property of Creative Trade Finance Ltd until such time as we have been repaid in full. At least point, the remaining stock is handed over to our client.