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Trade Finance Options

9.40 - 10.20. Trade Finance Options . William Tebbitt Commercial Director, Trade Finance Partners. www.ifa.org.uk. Options available to businesses. Funding Business Growth. Challenges Facing UK Business. UK economy is about SMEs.

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Trade Finance Options

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  1. 9.40 - 10.20 Trade Finance Options William Tebbitt Commercial Director, Trade Finance Partners www.ifa.org.uk

  2. Options available to businesses Funding Business Growth

  3. Challenges Facing UK Business UK economy is about SMEs Since 2008 the SME sector has suffered a lending decline of 40%

  4. Scenario A business has won a substantial new order and is examining the options available to it to finance the order The Order The Goods The End Customer The Trading Cycle

  5. Traditional Sources Of Finance Bank Lending Shareholder Finance Negotiating Payment Terms Internally Generated Cash Equity Finance

  6. Traditional Sources Bank Lending Typical Banking Products Banks Lend Against Security

  7. Traditional Sources Internal Release Cash In The Business Shareholders Loans

  8. Traditional Sources External Equity Finance Payment Terms - Supplier Payment Terms - Customer

  9. True Trade Finance What is true trade finance Ability to fund the supply chain without taking on debt or selling equity The fundamental difference is that true trade finance is not lending; its trading A true trade financier takes genuine risk by buying goods against confirmed purchase orders

  10. Scenario Revisited It was a true example The Business The Order The Goods The End Customers The problem

  11. The Trade Finance Solution

  12. The Trade Finance Solution Key Differentiators Ability To Open Purchase Commitments End to End Supply Chain Finance Physically Trading Of Goods Transactional Finance

  13. Goods That Have Been Funded by TFP • Gas BBQs • Pizza boxes • Bluetooth keyboards • Seasonal giftware • Homeware • Iron ore • Used vegetable oil • Baby clothing • Commercial batteries • Replacement windscreens • Components for hydro-power stations • High resolution surveillance cameras • Garden games • Recycling equipment • Components for oil industry • Woodchip/biomass

  14. When It Goes Wrong We Take Risk Insurance Communication Security Knowledge and Experience Due Diligence

  15. Conclusion All things to all people; there is no one size fits all It is essential to understand the limitations of solutions as it is to understand the benefits More than one product may be required to solve the funding challenge Business people must ensure they are aware of solutions available and how to use them

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