John Mackey Content Who we are? What we do? What is Invoice - - PowerPoint PPT Presentation

Understanding Invoice Finance John Mackey

Content

• Who we are?
• What we do?
• What is Invoice Finance?
• Who can avail of Invoice Finance?
• Industry Statistics
• Case Studies
• Questions

Who we are?

Bibby Financial Services is the World’s Leading Independent Invoice Finance provider. We help SMEs to grow by providing funding solutions which are attuned to their ever changing needs.

What we do?

Invoice Discounting Export Finance New Start Business Finance Full Service Invoice Finance Recruitment Finance Bad Debt Protection Credit Control

Funding Solutions

We work as an extension of your team We create and deliver tailored funding solutions We will help your business reach its full potential We move quickly so you can keep your plans moving

Our product portfolio is based on understanding your business

What is Invoice Finance?

An immediate and on-going supply of funds against outstanding invoices

Who can avail of Invoice Finance?

Business Structures Key Sectors

• Businesses trading B2B
• Trading on Credit Terms
• New Starts
• Mature Businesses
• Sell & Forget

Types of Businesses

• Limited Company
• Sole Trader
• Partnership
• Haulage
• Distribution /

Wholesale

• Services
• Manufacturing

Industry Sector in Ireland

Number of users of invoice finance

The industries that are in high demand of asset based finance in Ireland include:

Retail, Construction & Other (12%)

Source: ABFA Industry Statistics Report Q3 2015

Case Study

Business Type: Textile Manufacturing Funding: €1.2 million Turnover: €3.5 million The Solution - Export Confidential Invoice Finance facility

• Customers are based in Italy, Hong

Kong, Japan and the UK

• €1.2m in funding to accommodate

their busy period This business had no bank borrowings and chose BFSI due to the speed at which the facility was set up (3 weeks) and the fact that there were no restrictions placed on the funding

• f export debt.

The Company A well-established Irish business in

• peration for over 100 years,

specialising in weaving high quality cloth for high end fashion houses worldwide. The Challenge

• Mainly seasonal business with over

70% turnover occurring between March and July

• Major strain on cash flow restricting

further growth

Case Study

Business Type: Nursing Home & Residential Care Funding: €450,000 Turnover: €3million The Solution – Disclosed Invoice Finance Facility

• €220k funding released within 2

weeks enabling them to maximise capacity and increase profits The Company Established over ten years ago, this business operates a number of nursing homes in Ireland providing services to the HSE from emergency/contract beds to longer term care under the Fair Deal scheme. The Challenge

• Struggling to meet the monthly

running costs of the nursing homes due to the extended credit terms with the debtor

Case Study

Type of Business: Wholesale Distributor Funding: €800k Turnover: €5million The Solution - Confidential Invoice Discounting (with disclosure on top debtor with 80% concentration)

• Structure a facility whereby we

could fund the main debtor to 80%

• f the total ledger at a prepayment
• f 75% (70% with their previous

provider).

• The facility has provided the

business an additional €150k in cash flow which had been tied up in restrictions on their previous facility The Company This company is wholesale distribution

• f electrical good and kitchen utensils.

They previously had a Confidential Invoice Discounting facility with one of the pillar banks. The Challenge

• Previous provider had restricted

funding for the main debtor at 50%

• f the total ledger, thus 30% of their

ledger was not being funded

Case Study

Type of Business: Alcoholic Beverages Manufacturer Funding: €500,000 Turnover: €6million The Solution – Disclosed Export Invoice Finance with international currency accounts and multi-lingual services.

• Provides on-going access to funds

as soon as the products leave the manufacturing plant in Amsterdam.

• Client upgraded facility with bad

debt protection for one of their larger debtors who are based in Korea, we were able to obtain a limit of €400k against this debtor which gives our client further confidence when trading The Company Established in 1998, this company is involved in the development and manufacture of alcoholic beverages. The Challenge

• Extensive growth plans with

investment in brand development and promotion putting a strain on cash flow

• Working capital tied up in extended

credit terms of up to 100 days to

• verseas debtors
• Over 90% export sales to countries

such as Australia, Korea and US

Case Study

• Exporting to Mainland Europe, largest customer in Italy.
• Opportunity to double trade levels with largest customer.
• Current cash flow and banking facilities will not fund this potential

growth – approx. 75% year on year.

• Existing debtors ledger of €450k – funding limit of €600k with

prepayment rate of 75%.

• Turnover to grow from €1.7m to €3m with aid of facility.
• Net profit margin to grow from 4.4% to 6.4%.

Business Type: Cloth Manufacturing Funding: €600,000 Turnover: €1.7million

Cash flow without Invoice Finance Facility

Month 1 2 3 4 5 6 7 8 9 10 11 12 Turnover 150 150 150 170 200 220 250 250 250 250 250 250 Receipts 150 150 150 150 150 150 170 200 220 250 250 250 Inflow 150 150 150 150 150 150 170 200 220 250 250 250 Outflow 145 145 145 460 210 230 240 240 230 230 225 220 Monthly 5 5 5

• 310
• 60
• 80
• 70
• 40
• 10

20 25 30 Cumm 15 20 25

• 258
• 345
• 425
• 495
• 535
• 525
• 505
• 480
• 450

Cashflow Without Facility (including potential growth):

Cash flow with Invoice Finance Facility

Month 1 2 3 4 5 6 7 8 9 10 11 12 Turnover 150 150 150 170 200 220 250 250 250 250 250 250 Receipts 150 150 150 150 150 150 170 200 220 250 250 250 Inflow 150 150 150 502 187 202 230 237 242 250 250 250 Outflow 145 145 145 460 210 230 240 240 230 230 225 220 Monthly 5 5 5 5

• 23
• 18
• 10
• 3

12 20 25 30 Cumm 15 20 25 67 43 25 15 12 24 44 69 99

Cashflow With Facility:

Cash flow without Invoice Finance Facility

Month 1 2 3 4 5 6 7 8 9 10 11 12 Turnover 150 150 150 160 160 160 160 160 160 170 170 170 Receipts 150 150 150 150 150 150 160 160 160 160 160 160 Inflow 150 150 150 150 150 150 160 160 160 160 160 160 Outflow 145 145 145 145 145 145 150 150 150 150 150 150 Monthly 5 5 5 5 5 5 5 10 10 10 10 10 Cumm 15 20 25 30 35 40 45 55 65 75 85 95

Cashflow Without Facility (with standard growth of 10%):

Profit & Loss Statements

Profit & Loss Statement

Notes:

• 1. No change in Gross Margin (40%)

With Facility: Year 2014 2015 Sales 1,700 3,000 Gross Profit 680 1,200 Net Profit €75 €192k Without Facility: Year 2014 2015 Sales 1,700 1,900 Gross Profit 680 760 Net Profit €75k €85k

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