Trade finance is a way of removing the payment risk and the supply risk for those involved in the trade cycle
Trade Finance ensures that you have the cash available to cover the costs associated with the importation of finished goods before the customer has paid their invoice
It also protects you and your customers from late payments, ensuring you never miss out on the cash you need to complete the order and purchase supplies
Purchase order finance
Normally used by SMEs who are unable to take on large orders from customers due to lack of cash resources needed to make a full, upfront payment on goods
Allows you to receive the funding you need for suppliers, staff and other costs as soon as you receive an order
Bridges the gap between an order being placed and paid for by a supplier and the payment is received by the end customer
Provides a fast, effective short-term cash injection allowing you to pay for goods or raw materials that are needed to fulfill a large order
How it works
Your finance partner will work with you, your customer and your supplier to make sure these time frames can be met
Payment is made to the supplier of the product which will allow them to be dispatched
Goods received and you can send onwards to your customer
An invoice is raised to your customer and the finance company pay off their supplier loan and make the balance of the invoice available
Using purchase order finance
If you use purchase order finance to secure stock from suppliers, they'll treat you like a cash buyer instead of having to open an additional line of supplier credit. This will attract better rates for you so you can profit off each other.
What is invoice finance?Invoice finance is a way of raising funds; giving you an immediate injection of cash, which could release up to 95% of the invoice value against your unpaid invoices, by the invoice finance provider agreeing to purchase your book debts.
What is invoice factoring?The factoring company purchases your book debts and will provide a full credit management service. In this service, they will: Talk directly to your customers and send out follow up letters Collect payments Produce monthly statements Allows access up to 95% of the invoice value. The lender will also provide disclosure in the way of an assignment notice placed upon the invoice.
Who are Alliance Commercial Finance Limited and what do they do?Alliance Commercial Finance Limited provide bespoke invoice finance, factoring and specialist supplier finance solutions to help businesses fund their working capital.
Why should I choose Alliance Commercial Finance?We spend the time talking to the directors to establish their requirements and provide them with the best options for their business. This enables a quick and reliable decision, allowing business to progress with as little disruption as possible. We constantly work with our funding partners to make sure we are up to date with current offers and products; which means you get impartial advice and the right product for your requirements. When you work with us, you will benefit from over 20 years' experience in the financial sector. Having worked at director level within the independent, non-bank owned factors, including those owned by merchant banks.
What's the difference between factoring and invoice discounting?With factoring, you will choose the lender who will collect the payment from your customers, this works best for small to medium sized businsses. Your customers know that you're using factoring but the factoring company will handle the credit control directly and will neogiate terms with customers. Invoice discounting is more straightforward and is used by large and established businesses. Compared to factoring, you will still have access to credit control but your customer will be unaware that you are borrowing against their invoices. With invoice discounting you can avoid a third party (the invoice financier), allowing you to deal directly with your customers.