The business – An importer of industrial machinery

– Trading for 20 years

– Sales over £3m per annum

– Retained profits of £100k

– Capital base of £800k

The scenario

Machinery is shipped after the supplier receives payment in advance. This creates a large working capital requirement pending receipt and onward sale. The process is not conducive to traditional trade finance, with an overdraft facility being the primary source of funding. Due to the large and unstructured nature of the overdraft, the customer was notified that it would be reduced, compromising its ability to maintain trading levels.

The outcome

UkMG facilitated a £250k credit facility to help pay international suppliers, while the bank reduced its exposure. The client’s risk profile has actually improved because the stock funded by UkMG funder was  caught under the bank’s debenture.

In turn, by having access to sufficient working capital, the customer continues to trade profitably.