Current assets, or trading assets, are amongst a company’s most liquid and financeable assets. Lenders' criteria, appetite, and pricing can vary widely, particularly between banks, non-banks, and private debt lenders. Lenders have unique approaches and preferences for evaluating receivables, inventory, and working capital financing.

Accounts Receivable - Common challenges:

  • The advance rate is insufficient
  • Receivables composition is too concentrated, amounts too small, or too large
  • Difficult customer terms and extended aging
  • Industry
  • Thin capital base and working capital
  • Performance of the business
  • Poor administration
  • High bad debt

Inventory - Common challenges:

  • The advance rate is insufficient
  • Mix of finished goods, raw materials, and work in process (WIP)
  • Saleability and location of inventory
  • Inventory turnover and obsolescence
  • Tracking and reporting ability
  • Industry
  • Thin capital base
  • Insufficient working capital margin support
  • Performance of the business
  • Management

Solution

While accounts receivable and inventory can appear to be easily quantified and liquid and therefore straightforward for a lender to assess, financing them is not usually a cookie-cutter solution. The anticipation of the issues together with a detailed presentation of the assets, their conversion cycle, and the business as a going concern is often necessary.

We identify the likeliest financing scenario, expected pricing, and most suitable lender(s). To build your lending case, we draw on our previous experience within this financing class and drill down into the details to ensure alignment with each prospective lending solution.

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You engage us, we do a feasibility assessment and give you a go/no opinion. If we do not deliver funding - - we don’t get paid.

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