Pay4, which aims to provide working capital solutions, was approached by the business after realising that their generous payment terms -- especially with independent retailers, restaurants, bakeries and event caterers - put great pressure on their working capital.
Established in 2000, the business has a wide range of over 1,000 products in frozen, chilled and dry in both bulk and retail sizes. The business has a turnover of £8.4million and net worth of £847,000. Ash explains:
"The business imports many of the products from Europe, Israel and other parts of the world. They pride themselves on supplying top quality products which means dealing with suppliers who want large orders and not very generous payment terms. However, in the UK they have to be generous with their payment terms.
"Their relationship manager understood this working capital need for the business and introduced them to Pay4. He also felt that the facility will be a great fit for them since it doesn’t cost anything to set up and it is easy to use and product is ideal for this type of business."
Even though the Pay4 customer already has other credit facilities such as commercial mortgage, Invoice finance, credit card and letter of credit and bonds, business qualified for a Pay4 facility since it is unsecured against business assets and only requires a personal guarantee. Also the facility is designed to work alongside other forms of funding. Ash adds:
"Pay4 was able to help them with a £200,000 revolving credit facility based on a strong balance sheet. The customer was very impressed to know that there were no set up or ongoing charges and no penalties for non-utilisation and no need of renewal required.
"The client loved the fact that by using Pay4 to pay their suppliers they could extend the term up to 120 days from date of invoice which would release the pressure on their working capital. Also with access to a £200,000 Pay4 facility they can feel confident when tendering for large business and order higher quantities and negotiate better prices, ultimately improving their profit margins."