The credit crunch lands at my door.

Lotus-eater

Alan, excuse me if you have explained, but what happens when you have to order next time? If you get the £65k now, will that be an onrolling thing to need the money to buy the next stock?

wisbech_lad

Ugh. Strange business that you can't get LOC (letters of credit) to at least finance the shipping period. Which bank? AFAIK HSBC are pretty good at trade finance, plus they have reasonable branch network in India, so might be more interested.

No consolation, but this is why in the "classic" business balance sheet you should always seek to match length of assets with liabilities. People remember this with assets (i.e. finance a vehicle with a lease or equity) but often forget that working capital is not short term, even if it is on a three month cycle, it is pretty much permanent if you want to stay in business, and should be financed by long term capital sources (long loans without recall or equity)

Using short term money to finance a long term asset (your rolling stock of granite) does put any business at financing risk - as the Icelandic banks found out.

Unfortunately, my guess is your best bet is doing a deal/ merging with your northern rival. No one else will understand the business quickly enough to be interested in becoming an investor (IMHO)

Alan_M_2

Lotus-eater wrote: »

Alan, excuse me if you have explained, but what happens when you have to order next time? If you get the £65k now, will that be an onrolling thing to need the money to buy the next stock?

Sensible question,.

We will have generated enough cash we have out of the stock we are selling now (we're currently holding circa £120K in stock). However with the void at Christmas extending two to three weeks into January (it really was incredibly dead at the beginning of this month) our cash flow suffered, add to this our bank want to reduce our facilities it leaves us unable to fund rolling orders for the future.

This morning we had an email from the supplier indicating they may be willing to offer facilities, so it's not all bad news.

This last 10 days business has picked up tremendously....so there's plenty out there.

Alan_M_2

wisbech_lad wrote: »

Ugh. Strange business that you can't get LOC (letters of credit) to at least finance the shipping period. Which bank? AFAIK HSBC are pretty good at trade finance, plus they have reasonable branch network in India, so might be more interested.

We can get letters of credit.....but whichever bank you take out the l/c with, debit your account for the full amount the day it's opened and put the money in a holding account..i.e. we pay in full in advance but our bank hold the cash instead of sending it to the supplier ourselves. No bank is different.

Only once you become AAA rated do you actually get credit on an l/c...it's actually a misnomer as you don't get any credit with a letter of credit until you're in a position that you don't need the credit. Plus the l/c gives us no security whatsoever and we're paying our bank £100's of pounds for making the transaction and holding our money.

michaels

Got to be one of the more surreal pieces of spam on here

ashishstone wrote: »

Ashish stone exports is a organization in the field of granite and also Manufacturers & suppliers in different Granite products such as Granite Slab, Granite Tiles, Granite counter top and vanity tops in India.

iB1

I first read it as hashish stone. And no, I haven't been smoking