Bibby Financial Services announces new support for UK importers
Global financial services provider, Bibby Financial Services, has extended its trade finance proposition enabling UK importers to pay overseas suppliers in advance of goods being manufactured and shipped.
Under standard trade finance arrangements, suppliers are paid when title ownership is transferred from supplier to customer – ordinarily following shipping. BFS’s new prepayment feature facilitates deposits and full payments for international and domestic suppliers earlier in the trade process.
Managing director of trade finance at BFS, Phil Tobin says the development will allow importers to consider a wider range of suppliers and ease cashflow pressure.
“Offering prepayments and deposits in this way is unique and will enable importers to access funding to pay suppliers earlier in the cycle, alleviating cashflow pressure and enhancing their bargaining power.
“Critically, this will allow UK businesses the freedom to find new supply chains and to increase overseas trade at a time when many SMEs are considering how to protect profit margins amid the uncertainty of Brexit.”
According the IMF and the Bankers Association for Finance & Trade, over a quarter of global trade transactions (27%) involve cash-in-advance. Through its enhanced service, BFS provides supplier deposits or full prepayment via ExWorks transactions.
“Many of our clients tell us that supply-chain relationships have changed since the referendum. Now, with just six months to go before the UK’s formal EU divorce, businesses need to be as versatile as possible to adapt to this changing environment.
“This development gives importers the option to work with international suppliers they may not have had access to before and can strengthen the relationships they have with existing suppliers. Furthermore, businesses will be able to negotiate early payment discounts with suppliers as a result of full or partial payment earlier in the trade cycle.”
The UK’s trade deficit narrowed to £1.86bn in June from £3.14bn in the previous month. Exports increased by 2.7% to £52.41bn and imports rose by 0.2% to £54.27bn.
“While exporting undoubtedly presents growth opportunities for the UK, importing is an equally important form of international trade, which is often overlooked. Importing is a vital means of efficiency and growth for millions of businesses and supply chains throughout the world so it is critical that the public and private sector can do everything they can to support international trade, particularly given the backdrop of Brexit.”