Deposits and cash on delivery (COD) payments to suppliers can put companies, especially those that are equity challenged, in a real bind. For example, you see an opportunity where acquiring inventory quickly can drive growth, or you have an opportunity to take advantage of a limited time purchasing opportunity. However, your supplier won’t ship without a guarantee of payment at the time of shipment. Financing the cost of that payment and the time the goods will spend in transit will leave you short of working capital for day-to-day operations.
Your credit is strong, but you have maxed out your bank operating facility or, you don’t want to tie up or increase your financing for a one-time transaction (not to mention that bank response may be both reluctant and slow). For companies in similar situations that may not have accounts receivable they can or want to borrow against, augmenting bank credit with Liquid Capital’s Purchase Financing Program (PFP) may be the right solution.
If your credit is good, you’re good to go.
The majority of Liquid Capital’s short-term financing solutions allow equity- and credit-challenged companies to secure financing based on existing assets such as accounts receivables or inventory. Our PFP is our only short-term financing solution that is based on a client’s credit status.
If your credit is strong, we will, upon completing due diligence, underwrite and finance your in-transit inventory – no matter where your supplier is located or whether the goods are for resale, inventory or consumption. Liquid Capital will provide a letter of credit to your supplier if required. You receive your goods and the transaction becomes final once you pay the PFP invoice as negotiated in the terms of our agreement.