Advertisement

Stock

Structuring Financing Solutions
  • Stephen A. JonesEmail author
Chapter
  • 7 Downloads

Abstract

Stock is a significant absorber of cash. Goods often need to be purchased and held in a warehouse for several months pending sale. Stock finance presents a challenge to the financier who has no control over whether, when, to whom and for how much the stock will be sold.

In this chapter, we examine how stock may be financed when this is held against call-off contracts. The credit quality of the borrower and ‘credit gap’ between the amount that the financier would be prepared to lend on a conventional ‘balance sheet’ basis and that required in the proposition is discussed; this determines the extent to which the facility is structured or controlled.

Keywords

Credit gap Fully structured Overdraft Partially structured Purchase order Self-liquidating facility Stock finance Trade cycle timeline Trade loan Unstructured Warehouse trade loan 

Copyright information

© The Author(s) 2019

Authors and Affiliations

  1. 1.AXS Trade Finance Ltd.Solihull, West MidlandsUK

Personalised recommendations