Finance

Firefox1975

You would stand a higher chance of securing the loan if you already have a purchase order from any potential customers.

could you try negotiating a letter of credit with your supplier to give you some breathing space to shift the goods?

BaggieBoy_3

Very much doubt they will give me credit as ive only just started trading with them. Got a few samples and thats it. They'd be taking a big risk.

The main reason i want to incoporate this into my existing company is that the existing company can start to repay the loan whilst the new venture hopefully gets up to speed.

Appreciate the advice everyone anyway. I'll go to the bank first and see where i stand

Keeping_Positive

Banks do offer trade finance to fund goods on the water / letters of credit but thats not my area of expertise. There are other products out there that may be suitable for you. I would put together a business plan and go to various banks and see what they can offer you. I would suggest invoice discounting/factoring but thats usually where a ledger is already set up to provide the initial payout and then run ongoing. The curent business may or may not be suitable for this and it works better for tangible products rather than IT services but I have seen it happen.

Firefox1975

BaggieBoy wrote: »

Very much doubt they will give me credit as ive only just started trading with them. Got a few samples and thats it. They'd be taking a big risk.

do you understand how Letters of Credit Work? Yes, there is an element of risk to the seller, but not much if they already operate such a system with other customers. Do they bank with the same bank as you? could you renegotiate the purchase price to factor in the element of risk? stagger the deliveries? do they already have suppliers/distributors within the UK?

BaggieBoy_3

Can't say i know to much about them other than i think its basically a guarantee that you will pay an agreed amount for goods supplied.

No, we do not use the same bank. They have no current suppliers in the UK.

I'm virtually there now anyway. I have all the costings in. I'm ready to contact the bank to see what they say. Thanks for the advice.

paddyrg

Hope it goes well for you! Let us know what the banks say :-)