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Lending
Release value from your assets to fund
growth and increase working capital
Designed for clients
with a turnover in
excess of £10 million
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Security may be required. Product fees may apply. Invoice Finance | Asset Based Lending
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Optimise your working capital
with Asset Based Lending
In a recovering economy, access to working capital is vital.
But how can your business access the liquidity it needs
to grow, adapt, revive or continue to manage day-to-day
requirements, when your money is tied up in payments
due, outstanding invoices and inventory? The solution
may be closer to home than you think. Asset Based
Lending from RBS Invoice Finance is a way of putting
those assets to work for you in the form of an evergreen,
fully collateralised credit facility.
Access to working capital has never been more important. Yet 11%1 of the average company’s
turnover is locked away in its assets – things like trade receivables, inventory and plant. That’s value that could be put to work for your business. If only you could use it.
Asset Based Lending from RBS Invoice Finance unlocks the value ‘trapped’ in your assets
Asset Based Lending releases the value tied up in certain assets within your business, freeing it up for you in the form of cash advance that is ‘evergreen’ – which means you can re-draw it based on availability generated from your trade receivables and inventory.
It’s designed for businesses with an annual turnover in excess of £10 million, whose balance sheets contain current assets, but who may not have access to ready reserves of cash. Manufacturers and distributors, for example, often have to invest in materials, inventory or technology months before payment is made. During that time, cash flow may be restricted.
Asset Based Lending enables you to borrow against that value – using your trade receivables and inventory – to finance the working capital you need.
What’s more, as your assets grow – in such things as receivables and inventory – you can increase your funding line appropriately, subject to credit approval. When turnover exceeds £25 million, we can look to financing your fixed assets alongside your working capital ones as part of our Corporate Asset Based Lending offering.
Your initial funding line is set up to
accommodate the highest required funding peak in your 12 month forecast. That means you operate with headroom that’s appropriate – having access to more working capital when you need it without having to slow your business growth or raise equity. And while the facility is there for you, if you don’t need it, you don’t have to draw from it.
Designed for clients
with a turnover in
excess of £10 million
Flexibility, agility, confidence
Asset Based Lending allows you to flex your trade receivables and inventory, turning them into powerful players. It’s a flexible and agile solution. Because it links to your assets, access to funding is quicker. There’s no need to re-apply as your requirement grows: so long as your assets cover it, your funding line is there. Businesses requiring more flexible forms of funding than traditional lending products may also find Asset Based Lending a good way to ease seasonal cash flow fluctuations, or to create extra cash headroom.
Fixed Asset solutions to complement your working capital
If your business exceeds £25 million annual turnover we would also like to help you unlock funding from your fixed assets such as plant and machinery and real property. The value of these assets can be used as collateral to support an Asset Based Lending line. A structured Asset Based Lending solution works in tandem with your business and can generate higher levels of funding (based on asset value) than traditional financing methods. It provides a significant initial injection of cash and also supports your business on an on-going basis as it grows. We work closely with your business to assess the value of the assets, review your financing need and then provide a bespoke funding solution creating the headroom you need to run your business.
Security may be required. Product fees may apply.
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1. Manage your day-to-day working capital
Economic recovery can present unexpected risks as cash flow is hit by the gap between outlay and payment. By freeing up the additional value in your business, Asset Based Lending can provide a valuable capital cushion, and offer you greater control over your cash conversion cycle.
In addition, Asset Based Lending’s weekly inventory monitoring and reconciliation opens the way to leaner purchasing and swifter, more accurate replenishment – helping you to run a more agile business, with less unused inventory dragging on the balance sheet.
2. Enable growth
By freeing up the additional value in your business, Asset Based Lending can provide the working capital to keep the day-to-day business strong, while you invest in the increased capacity to take on new orders as the economy returns to growth.
3. Support cash flow through seasonal or market fluctuations
Seasonal industries and those in fluctuating markets can present cash flow challenges. Manufacturing, distribution, wholesale – all experience extreme seasonal fluctuation in orders and payment. Yet businesses in those sectors still have to run plant, upgrade technology and collateral, and invest in raw materials and inventory all year round. Unlike traditional loans, Asset Based Lending’s flexible repayment schedule brings stability to this cycle.
4. Make fast buying decisions – allowing you to purchase materials quickly when the price is right
The ability to take swift action when buying could give you not only the freedom to take advantage of deals decisively but the ability to negotiate discounts on the basis of early payment too. Asset Based Lending brings forward the entire credit cycle for your business, so you could always have the cash you need.
Opening the doors to opportunity
By creating an additional pool of liquidity for your
business, Asset Based Lending can enable you to
take advantage of opportunities you may not have
been able to finance in the past, from the simplest
ideas to quite complex ones. For example:
By freeing up the
additional value in your
business, Asset Based
Lending can provide
the working capital to
keep the day-to-day
business strong
Businesses may also use the agile purchasing power offered by Asset Based Lending to help mitigate variations in the price of things like raw materials, fuel and services.
5. Business Restructuring
Market and economic volatility are key factors that can affect many businesses, no matter what their size – presenting challenges for some and opportunities for growth to others. Whatever your position in the market, it is important to review your business plan and financial arrangements regularly, to ensure they are working effectively.
Asset Based Lending can offer a more flexible alternative to providing liquidity and funding against the assets within your business. It can also be used to refinance traditional forms of bank funding, which can be seen as more covenant restrictive. The ‘evergreen’ credit facility that Asset Based Lending offers gives businesses the greatest amount of flexibility and borrowing capacity from their existing asset base. In addition, the facility is designed to grow as the company grows.
As part of the RBS Group, RBS Invoice Finance can also structure an Asset Based Lending line as part of an overall financial package. This means we can deliver a joined-up partnership approach, which can be helpful when reviewing your refinance options.
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Security may be required. Product fees may apply. Invoice Finance | Asset Based Lending
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Totes Isotoner, famous for Totes umbrellas, Toasties socks and Isotoner slippers and gloves, needed to consolidate financial support and increase its facilities in line with the growth of the business.
Having begun by selling umbrellas, Totes Isotoner’s introduction of the popular Toastie Slipper Sox range launched the company into the UK Christmas goods market. The business has continued to grow. Totes Isotoner now distributes through most major retailers, including Boots, Debenhams, John Lewis, Asda, Sainsbury’s and Tesco.
Following the company’s acquisition of Just Sheepskin (a slipper and outdoor boot company) in 2011, Totes Isotoner’s Financial Director Karl Bowden wanted to consolidate the business’s bank support and secure more
flexible facilities. “With our main product streams being weather-related or gift-type merchandise, we are a very seasonal business,” he explains. “We require a flexible facility that can move in line with that”. The solution for the business was an Asset Based Lending facility provided by RBS Invoice Finance, working with NatWest, to support the future growth of the company. The working capital it provides will allow the business to buy inventory and fund the company’s seasonal business cycle. “We can see more headroom in our facility to provide the freedom we need to support the continuing growth of the business,” says Karl Bowden.
Matrix Polymers is a great example of a successful and fast growing UK business, expanding its horizons and moving into new markets overseas.
The company supplies raw materials and accessories to the rotational moulding industry. The company has seen phenomenal growth over the past few years and will now open a new plant in Malaysia – which will act as a springboard into the Asia Pacific region. It’s a move financed by an inventory facility of £1million, in addition to an existing Invoice Discounting facility of £5.5 million from RBS Invoice Finance – who structured the £6.5 million Asset Based Lending facility to allow Matrix Polymers to borrow money against
its inventory as well as its debtors. Baker Tilly advised Matrix Polymers on the deal, and provided practical help on how to set up the Malaysian operation.
“This funding has allowed us to start work on opening the Malaysia plant, which will help us expand into South East Asia and the Pacific region,” says Martin Coles, CEO of Matrix Polymers. “The Malaysian plant will include a manufacturing facility and a marketing and sales team. The rotational moulding market is growing fast in Asia and this is an exciting opportunity to establish ourselves as a market leader in terms of our technical and product strengths.”
How Asset Based Lending helped manufacturer
Totes Isotoner cope with seasonal change in demand
Asset Based Lending is powering a Northampton-based
plastic powder supplier into Malaysia
“More headroom
provides us with
freedom to grow”
Karl Bowden, Financial Director, Totes Isotoner“An exciting opportunity
to become market
leaders in Asia”
Martin Coles,
CEO of Matrix Polymers
Case Studies
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Security may be required. Product fees may apply.
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British-headquartered INEOS Compounds is one of Europe’s largest compounding businesses. It supplies 115,000 tonnes of product to over 700 customers internationally from three European sites. Its product is primarily used by businesses who produce final PVC or UPVC related product with
important end markets including construction, automotive, packaging and medical supplies.
The company recently took on an Asset Based Lending facility from RBS Invoice Finance as part of an overall funding package provided in conjunction with RBS Corporate and Institutional Banking.
The Asset Based Lending facility consists of working capital and term loan funding against the company’s receivables, inventory
and fixed assets for its three compounding sites in the UK, Sweden and Switzerland. RBS Invoice Finance worked alongside advisors from KPMG, DLA and Norton Rose Fulbright to tailor the package to INEOS Compounds’ precise needs.
“This deal represents a great success for IC,” says Nick Dodd of KPMG’s Northern debt advisory team. “It provides a fantastic opportunity for the business to build on its outstanding global reputation in the PVC Compounding industry. The Asset Based Lending funding package will provide the business with the standalone facilities required to pursue its strategic objectives.”
British based malt and malted ingredients manufacturer Muntons is firmly focused on growth, thanks to an Asset Based Lending funding package from RBS Invoice Finance.
Muntons sells over 180,000 tonnes of malt annually to major blue chip clients across the food and drinks industry. Its malt is a key ingredient for products ranging from whisky, beer, confectionery and a variety of foods. The fast growth of the business is highlighted in its turnover figures, with a significant increase in the last six years with a turnover in 2007 of £54 million rising to over £100 million last year.
The company uses the Asset Based Lending facility to support export activity as well as its operations in Britain – including strengthening their purchasing power when it comes to barley and other raw materials.
The cost of barley has doubled in the last few years due to poor harvests and increases in demand and its Asset Based Lending line is helping Muntons to meet this and other challenges the market brings.
“We buy in excess of a quarter of a million tonnes of malting barley each year and when the price doubles having access to sufficient funding is an essential,” explains Alan Ridealgh, Managing Director at Muntons. “The new arrangements we now have in place through RBS will provide us with the flexibility to cope with these demands and will enable us to grasp opportunities to grow our business profitably.”
“A fantastic
opportunity to build
on an outstanding
global reputation”
“Flexibility to cope with
demands and to grasp
opportunities”
Asset Based Lending is powering British manufacturer
INEOS Compounds towards its strategic objectives
British manufacturer Muntons is using Asset Based
Lending to cope with material price fluctuation and
to boost its strategic agility
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Security may be required. Product fees may apply. Invoice Finance | Asset Based Lending
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Trusted partners: RBS Invoice Finance’s dedicated Asset Based Lending team
Asset Based Lending has its own specialised team of experienced and accredited
Relationship Managers. As an Asset Based Lending customer, you will have your own dedicated Relationship Manager, readily accessible and dedicated to supporting your business needs. They will be able to assist with up-to-date industry insight and information, as well as addressing any issues and providing information on other Group products and services.
If you would like to find out more about Asset Based Lending, or a more traditional Factoring or Invoice Discounting solution, please do not hesitate to talk to your Relationship Manager or one of the team from RBS Invoice Finance.
@rbsif
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FacFlow: An extra engine to drive
your business
There’s another advantage to Asset Based Lending.
The monitoring structure it gives to your finance
team can provide you with fresh insight into your
payment cycles and debtor profiles. This insight can
be a valuable ally in process management, forecasting
and lean purchasing, helping you run your business
that’s insight-driven and agile – and to reduce the costs
associated with process delays, as well as unused assets.
The low-maintenance solution: Asset Based Lending with FacFlow
Asset Based Lending is unobtrusive too. There’s no requirement for spreadsheets or bulky reports – just a regular upload of your financial position via our easy-to-use FacFlow online interface. So you and your finance team can focus on running your business.
FacFlow gives you and your team instant, easy access to your Asset Based Lending account online.
You can submit your figures, invoices and credit notes, as well as request and track payments online, giving you greater control over your finances. FacFlow can also be adapted to fit your business’ structure and processes. It also includes instant, confidential messaging service so you can communicate with us directly and securely on-screen. We use only the very latest encryption technology, so your data is secure. What’s more, FacFlow has been accredited by the Institute of Chartered Accountants of England and Wales (ICAEW) and our clients regularly feedback on its ease of use.
“
I have been involved
as FD in companies
using Invoice Financing
for 23 years and during
that time have used many
systems. RBS Invoice
Finance FacFlow is the
best of all of the systems
I have used. Its ease and
functionality, particularly
when balancing at month
end, gives FacFlow the
edge over the other
systems in use.
”
We offer a broad range of solutions to support you and to complement Asset Based Lending including Bad Debt Protection and internal business services.
90435083 RBS03908 04/14
