When Mitchell and Peach received a large order for their luxury lavender hand cream, they wanted to say yes. The fifth generation farm in Kent, England, specializes in hand-blended bath and body products made from the family’s fine lavender and honey farm. The order had the potential to introduce their product line to a new market and new customers.
A quick, infusion of capital against the invoice from the retailer enabled them to fulfill the order with short-term, cost-effective funding.
Putting Capital to Work
When opportunity knocks, too many small- and medium-sized businesses can’t answer the door. They lack the cash or flexible financing to take advantage of the moment. Mitchell and Peach discovered a single invoice financier based in the UK that lends to SMEs. Advance Global Capital (AGC) recently partnered with the financier to bring more working capital to more businesses like Mitchell and Peach.
“We’re excited about partnering with a company that so clearly aligns to our values,” said Janet McKinley, co-founder of AGC. “The problems SMEs (small and medium-sized enterprises) face are universal. Working with factors helps us develop leading edge ways to streamline operations and put more capital to work in emerging and underserved markets.”
Common Challenges for Growing Companies
AGC and our financial partners seek to alleviate the cash flow constraint for SMEs through trade receivables financing. Their customers face challenges common to SMEs everywhere:
- A start-up has a really good idea, makes a first sale and has to wait 90-days for payment.
- A large buyer increases their payment terms and suppliers have to scramble for payroll.
- An established business wants to scale up to take advantage of a market opportunity.
- A company is in a bit of trouble and needs a cash flow boost.
“We provide help for SMEs in the UK, the people who find it hardest to get help,” said AGC’s factor partner. “If you have the skills to make a sale, we have the skills to back it.”
A Partnership with Value for Everyone
AGC works with local financial institutions in emerging and underserved markets to stimulate economic growth through support for SMEs. We select partners who have a solid business proposition and a strong connection to the economic and social well-being of the communities they serve. The partnership with the invoice financier in the U.K. helps to diversify the portfolio and refine the model for investing.
This partner takes a wholistic approach to funding SMEs. They conduct a solid credit assessment of the customer and perform rigorous due diligence. They seek long-term partnerships to help their customers make the most of the capital they receive. They prefer to meet customers in person, visit the factory, farm, or warehouse, and, if needed, offer business mentorship services. “People garner trust from seeing the whites of people’s eyes,” he says. “It’s a part of business so lacking today.”
RBD Import turned to the factor to build their wholesale business. They buy last season’s goods from Matalan, a UK department store, and resell it back into the wholesale market. In the first 7 months working with short term financing, RBD has added 4 jobs and is planning a new warehouse. The expansion has enabled RBD Import to deliver on their proof of concept and become a trusted supplier for Matalan.
A Valued Partner
AGC targets the “missing middle”— companies that are too big for micro-finance and too small for traditional bank and private equity infusions. “We believe that when hard working people have more access to working capital,” said Janet, “their businesses prosper and, in turn, their communities thrive.
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