Purchase ( Stock ) Finance

Stock finance which is also known as purchase finance is essentially a short-term funding solution against a specific transaction. Generally, it is "off-balance-sheet" finance and does not affect existing finance facilities such as bank overdrafts. Purchase finance can also allow you to take advantage of discounts for prompt payment. The finance company offers you credit and pays your supplier on time. The finance company can often obtain credit from suppliers and act as the buyer of goods.

It is well suited to businesses who are either importers or UK traders looking to source and supply goods within a short time scale. The trade financier will look at the strength of the order and decide to fund the purchase rather than the credit-worthiness of the entire business. This allows many SMEs, including start-ups, to obtain this type of finance with relative ease.

Purchase finance can be used to: 

• buy goods or services on credit on the financiers' credit-rating which may be stronger than yours
• negotiate supplier discounts in exchange for prompt payment
• realise an opportunity requiring ready cash such as buying out of season or liquidation stock
• buy seasonal stock
• import goods
• refinance existing stock

Export VAT Finance

This is a specialist type of finance and only a few finance companies offer this type of facility in UK. It is appropriate where goods are bought in the UK for cash and then exported for cash. Typical goods are likely to be:

• Computer peripherals
• Mobile phones

This type of facility is useful if you buy goods in UK, on which you have to pay VAT and sell them overseas without VAT. The higher margins overseas may generate extra profits but creates short-term cash flow issues as the VAT on purchases is tied-up with the Customs & Excise until a recovery is made through the VAT cycle. The export VAT finance facility bridges this funding gap, allowing you to take advantage of more profitable opportunities overseas. Certainly, these types of financing arrangements are expensive, compared to normal bank facilities, but the point to remember is that these are additional sources of profit which can be significant to wholesale trading companies.

Unpaid Invoice Solutions

31% of invoices in Europe remain unpaid. How much do you lose every year as a result?

Risks are an inherent part of business, but OTF offers you unique solutions, you can easily rule out a number of them:

• Doing business with (unknown) foreign partners: securely with the help of documentary payments.
• Poor payers: safeguard your interests with credit insurance
• Non-payment of transactions or non-compliance with the purchase agreement: protect yourself with an Escrow contract

Receivable Financing

Do you know that 30% of outstanding receivables in Europe is overdue and more than 10% is overdue for more than 1 year.

Receivable financing is a tremendous source of immediate capital for your business. It is a great solution for solving cash flow problems with a business, and also has tons of distinct advantages over more traditional options like a standard business loan or a small business line of credit. With receivable financing you sell your accounts receivables to a third party company that will pay you for the invoices. This gives your business instant cash instead of having to wait to receive payment which is why many businesses run into cash flow issues. This situation of outstanding receivable can have a considerable impact on your capacity to develop your business : your cash flow comes under pressure and your company has to seek a solution in continuously higher credit lines, often in the form of expensive overdraft facilities. However, it is possible to get faster incoming payments while still granting your clients time to pay. OTF Finance department proposes flexible receivables financing, offering you immediate valuable working capital.

It allows you to pay your suppliers sooner and get discounts on your purchases and to fund turnover growth and investments. This improves your cash flow, your solvency and your profitability.

Credit Insurance

Credit cover: let bad debtors become a risk to us rather than to you.

No business likes losing money because a customer makes late payments or fails to pay at all. We arrange a credit insurance policies to give you choice in terms of the degree of security from bad debt that you want, in which countries you would like to secure credit protection, your cash flow requirements, how much you want to spend and the extent to which you want to outsource your credit management. This is a suitable credit protection for you, so you need never worry about a bad debt again. You can trade on "open account" conditions, even for international orders. We could even arrange a Credit Cover and guarantees compensation - up to the agreed limits - for all invoices overdue by more than 90 days, whatever the reason for your debtor's default. What is more, the credit cover meets the costs related to the recovery of these amounts so that the money we give you remains yours.

For you, writing off bad debts is consigned firmly to the past.