- Business: UK-based manufacturer
- Challenge: Transitioning from domestic manufacturing to an import/export model
- Trade Finance Facility: Circa £800,000
- Invoice Finance Facility: Circa £700,000
Enness was approached by an established UK manufacturer that was changing the way it operated. After years of producing goods domestically and exporting them to customers across Europe and the US, rising production costs and increased competition had begun to put pressure on margins.
To remain competitive, the business decided to move towards importing products from overseas manufacturers instead. While this offered a more commercially sustainable model, it also created a very different working capital requirement.
The company now needed to pay overseas suppliers upfront, while the process of manufacturing, shipping and delivering the goods meant it could be around 90 days before those products generated revenue. The business did not have sufficient cash reserves to comfortably fund this gap on an ongoing basis.
Enness looked at the entire working capital cycle rather than treating the supplier payments and customer receipts as separate problems. We worked with a specialist trade finance lender to structure two complementary facilities.
The first was a revolving trade finance facility of approximately £800,000, which allowed the business to fund larger orders from overseas suppliers without tying up all of its available cash. The second was an invoice finance facility of approximately £700,000, allowing the business to release funds against invoices once the goods had been shipped to customers.
The two facilities worked together to support the business throughout the cycle. Trade finance provided the funding needed at the beginning of the process, while invoice finance provided liquidity once the goods had been delivered and invoiced. The proceeds could then be used to repay the trade finance borrowing, helping the business manage the cost and timing of its funding.
This structure gave the manufacturer the flexibility it needed to move into its new import/export model without placing excessive pressure on its existing cash reserves. It also meant the business could continue taking on orders while having a clearer funding solution for the gap between paying suppliers and receiving customer payments.
The case highlights how working capital finance can be structured around the way a business actually operates. For companies changing their supply chain, entering new markets or taking on longer payment cycles, the right combination of facilities can help support growth without putting unnecessary strain on day-to-day cash flow.
If your business is facing a working capital gap or changing the way it sources, manufactures or sells its products, speak to a corporate finance specialist to discuss your requirements.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or accounting advice. Finance is subject to status, underwriting and lender criteria. Terms and availability will vary depending on individual circumstances, business performance and the proposed transaction.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
