Alternative funder Bibby Financial Services has teamed up with the State-owned Strategic Banking Corporation of Ireland (SBCI) to introduce a new solution that allows businesses to buy, receive and sell goods before needing to pay for them.
The product is aimed primarily at small and medium-sized businesses looking to buy goods for resale, either from within the State or from overseas.
While purchasing goods for resale can be lucrative, SMEs often face difficulties accessing finance for the purchase of products or may be unable to obtain or agree credit terms with suppliers.
The new Trade Finance solution guarantees to pay a business’s suppliers as soon as goods are dispatched and can also provide businesses with funding to bridge the gap between paying for goods and receiving payment from customers.
Bibby’s Trade Finance is tailored to support businesses operating in more than 70 different sectors, from clothing, textiles, cosmetics and perfumes through to electronics, furniture and sporting goods.
Shortfall
Mark O’Rourke, managing director at Bibby, said the solution would be able to easily buy and sell goods confident in the knowledge they wouldn’t suffer from a shortfall.
“We can make payments on behalf of SMEs to help transactions take place and then when the purchase turns into a sale then fund it through our Invoice Finance to liquidate the trade position,” he said.
“Access to cashflow solutions is still an issue for Irish SMEs. Much of what is offered by the banks are overdrafts that can be quite rigid whereby once limits are reached, you have to wait for cash to come in whereas our facility is more fluid and grows as the business is growing,” Mr O’Rourke added.
Other options
He said the new solution offered an annualised 2.16 per cent saving for SMEs compared to other funding options.
Bibby first partnered with the SBCI in 2016 to more easily channel money to SMEs. Other partners include AIB, Bank of Ireland, Ulster Bank, Finance Ireland, Merrion Fleet and First Citizen Finance.
The SBCI was established in 2015 in the wake of the banking crisis to offer loans to SMEs that are typically up to 2 per cent cheaper than current market rates.
