Component Part Finance
What is it?
Funding to purchase parts/components to assemble into finished goods before you sell to your customer.
Who is it for?
Component Part Finance is for a business which has received a purchase order from its customer but doesn’t have enough goods/components to purchase the materials required to complete the order.
What type of business?
This type of product will work well for manufacturing and engineering businesses who need to fulfill large quantity orders.
Component Finance enables you to fulfil customer orders more efficiently by ensuring you have the necessary materials on hand. It can also reduce costs, as goods are paid for upon delivery, and allows you to take on the next order while awaiting payment from your customer.
How does it work?
- A Finance house will pay up to 100% of the cost of the goods secured against an order.
- Suppliers can be paid on a pro-forma basis to enable you to obtain the best deal.
- Your business then assembles the parts in to finished goods.
- You deliver your goods and invoice. At this point you can assign the invoice to an Invoice Finance Facility and settle the money borrowed to allow you to repeat the process.
- Fees are charged on how long you borrow the money for. So, the quicker your turnaround from part to completed goods and payment, the less the fees.