Tailored expertise secures flexible funding for homeware wholesaler’s growth
A wholesale business, focused on the import and supply of a wide range of home and lifestyle products – including steam cleaners, mops, cookware, and home gym equipment – had been steadily growing and evolving over time.
With a significant turnover, the business had historically focused on B2B sales to high street retailers. However, during the Covid-19 pandemic, its trading model shifted significantly from 80% B2B business to a 70% B2C model, with just 30% of sales on credit terms, to retailers. The team at Hilton-Baird Financial Solutions had supported the client previously, introducing them to their original funding provider. However, as the business evolved so too did its funding needs.
The challenge
The customer base had become largely focused on a single debtor who made up approximately 80% of B2B turnover, with the added complication of these sales being under sale-or-return (SOR) terms. The remainder of sales were driven by emerging direct-to-consumer channels, reflecting the company’s strategic pivot toward a more agile, omnichannel approach.
With the B2B ledger shrinking and a high concentration of sales to one customer, the business needed a finance provider whose offering was more aligned to its evolving operational needs. The client also needed additional headroom to support its growth ambitions, including plans to expand its product range into new categories such as haircare.
Given Hilton-Baird’s knowledge of the full breadth of the industry, we could identify which lenders could accommodate the unique nuances of the trading model. The business had already approached another brokerage via an online enquiry form but had received only a series of generic quotes by email, without the deeper engagement needed to fully understand the business and its requirements. These proved to be unsuitable and the impersonal approach left the client frustrated and no closer to a solution, prior to engaging with Hilton-Baird.
The solution
Hilton-Baird took a different approach – our standard approach. Drawing on a deep sector knowledge, our team conducted a detailed fact-find, including a thorough review of the financials, aged debtors, creditors, and debtor agreements. We also took the time to revisit the business’s overseas ownership structure and shareholders, as well as the operational realities of its evolving sales model.
With our breadth of experience across the commercial finance sector, we identified several funders who could potentially deliver a facility, tailored to the client’s needs. We ensured each provider was fully briefed on the business’s profile and had sufficient insight into the specific challenges posed by Sale or Return terms and debtor concentration – along with the viable mitigants for each.
The client ultimately selected a provider who demonstrated a genuine interest in understanding the business, which routinely includes a site visit to gain first-hand insight into operations and growth drivers. The result was a confidential invoice discounting facility, with an 85% advance rate – ultimately, providing the flexibility and scalability the business required.
The result
With the new facility in place, our returning client continues to have access to the working capital headroom needed in line with its growth strategy, including the expansion of its product range and continued investment in the direct-to-consumer channel. The structure of the facility accommodates the business’s unique trading model, while offering the agility needed to proactively respond to market opportunities.
The client valued Hilton-Baird’s consultative, hands-on approach – especially in contrast to its experience with another broker, who had assumed the focus was price driven and failed to understand the nuances of the business.
To explore the options available to your business, or to compare any existing facilities against the wider market, contact our team on 0800 9774833 or request a call back.
