FAQ
My business is profitable, why would it need external funding?
Profitability does not always mean a positive cash flow...all types of business share the same need for working capital in order to operate and pay suppliers, staff, rent, overheads and increase sales to expand - and become even more profitable!
Have you heard the saying "Cash is King"?
Even profitable businesses may have insufficient cash to meet payments. In the long term, a business will need both positive cashflow and profitability to survive, but of these, in our opinion, cash is the most important.
What exactly is Invoice Finance?
Put simply, Invoice Finance is the sale of a business's unpaid invoices to an Invoice Financier (such as Trafin) for a payment equivalent of up to 90% of the value of invoices. When the invoice is paid by the Buyer you receive the other 10% less our modest charges. This enables the exporter/seller to get instant access to the cash they've earned, when normally they have to wait 30, 60 or even 90 days for Buyers to settle invoices and so for the money to appear in their bank account.
Is my business suited to Invoice Finance?
Businesses ideally suited to Invoice Finance will:
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Sell on B2B basis - sell to other businesses on trade credit term
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Buy or Sell a tangible product (we only finance Invoices for Services in UK)
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Raise invoices to Buyers in overseas markets or to companies in their own country
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Import goods from overseas suppliers - we can pay the factory overseas for you
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Have a relationship with a Supplier or Buyer for minimum 12 months and have successfully completed several trades/transactions that have been paid pretty much on time
If your business fulfils the above criteria, then it is very likely to be suitable for our invoice finance solution!
How many years of credit history do I need to have for an Invoice Finance facility?
Here's the really good thing - an extensive credit history is not required to be eligible for Invoice Finance! This is unlike the common requirements of many other forms of external funding, such as bank loans and business overdrafts, which tend to focus on perceived worth in the Balance Sheet or insist on taking charges over the marital home in order to provide a facility.
It's your Buyers/Customers of your business that Trafin is interested in to determine whether you can access invoice finance. This means those businesses which may have been turned down for bank funding due to a lack of credit history are often able to get funding through invoice finance.
I am a Buyer/Importer - how much do I need to be turning over per annum to access Invoice Finance/Supply Chain Finance to pay suppliers?
At Trafin, we provide our services to established Buyers that can provide us with two years financial statements and have a minimum annual sales revenue/turnover of $/£10 million per annum. Must be profitable and must have minimum shareholders tangible net assets in the last balance sheet of $/£1m.
I am a Factory/Exporter - how much do I need to be selling per annum to finance the Invoices to my Buyers?
For Sellers the criteria is different; provided you have produced your first set of annual accounts and you are profitable, you have a proven good quality product and you can offer us good quality Buyers that qualify to the foregoing, then it's likely we can offer you an Invoice Finance facility.
How much money could I raise using Invoice Finance?
This all depends on how much cash you have tied up in unpaid invoices. To use our services', you need to provide invoices for each buyer/customer that is no less than £/$500,000 per annum for each Buyer. We also require minimum of two buyers/customers. If you are a Buyer and you want us to pay your Suppliers, we require minimum two suppliers with £/$ 500,000 each supplier per annum.
What are the different forms of Invoice Finance you provide?
Trafin provides both Seller driven funding (Receivables Financing) and Buyer driven funding (Payables Financing & Supply Chain Finance). Seller facilities are on Non-Recourse basis - meaning we take the Buyer risk. In both cases, these facilities are available to buyers and sellers around the world.
Won't Invoice Finance impact on my strong customer relationships?
No, absolutely not! We are not responsible for your credit control nor sales ledger management. We only become involved if a buyer does not pay on due date. Even then we communicate with you first before we do anything - it's your customer and you remain in total control.
I am a big Buyer of goods from overseas and domestic suppliers - can I finance my purchases through Trafin for both domestic and overseas suppliers?
Yes, you can! - provided you meet our financial criteria mentioned above and secondly you are in country where our legal agreements are effective - please ask and we can quickly inform you.
I do not get involved in Exports or Imports - can I still use Trafin's Invoice Finance?
Yes, in most situations you can! - provided your country does not have certain compliance rules - best way is to call us, and we can discuss.