April 14, 2023

How APTF supported a leading golf equipment supplier.

An innovative trade finance solution that enabled an SME client to expand its global business and remain competitive.

AP Trade Finance Inc. (APTF) is a subsidiary of Accelerated Payments, offers innovative solutions to small and medium-sized enterprises (SMEs) facing challenges in cross-border trade funding.

Our client, a company specializing in the sale of golf products, faced the challenge of procuring inventory at a cost-effective price domestically and, as a result, decided to source products overseas. Having found an alternative, the client further faced the challenge of obtaining regional funding for their purchase orders. The client partnered with APTF and utilized our Purchase Order Finance product in combination with our Logistics Services solution.

The Problem

The client, who is a US based SME, was struggling to secure the volume discounts it needed to remain competitive in the market by procuring inventory locally. After discovering APTF’s Purchase Order Finance product, the client saw an opportunity to increase their purchasing power and volume, securing better costs from an overseas manufacturer.

As part of APTF requirements, the client must have and exit guarantee either through a factoring company or an acceptable payment guarantee.

The SOLUTION

APTF provided a best-in-class Purchase Order Finance solution for the client. The client was able to obtain a bank guarantee from their local bank, enabling the client to take advantage of APTF’s solutions and increase their margins.

With the payment guarantee from the client’s bank, APTF was able to advance the funds required for the purchase. In addition to providing the required funds, APTF also supervised the production of the goods, ensuring quality and quantities were as per the purchase order agreement. APTF also managed the entire logistics, delivering the finished products directly to the client.

The Benefits

The use of APTF’s Purchase Order Finance solution brought a multitude of benefits to this client.

The client was able to increase their purchasing volume from an overseas manufacturer, obtaining better costs, ensuring the client remains competitive in its market.
The payment guarantee from the clients bank provided APTF with the comfort needed to advance the funds required for the manufacturer and deliver the finished products directly to the client.
The Logistics Services offered by APTF allowed the client to save time and resources that would have otherwise been spent on managing the transportation and delivery of the goods; thus, permitting the client to focus on their core business.
APTF’s supervision of the quality and quantities of the product while at the production site ensured that the client received the exact product they had ordered, meeting their standards and specifications.
Additionally, the client was able to receive the finished products and pay the manufacturer within 120 days, providing the SME with financial flexibility and stability.
The APTF Purchase Order Finance solution not only provided the required liquidity but also handled the entire logistics, reducing the clients risk of fraud, non-conformity, missed delivery and non-payment.

The Process

The process of APTF’s Purchase Order Finance solution was simple and straightforward and efficient for this client.

The client approached APTF with the opportunity to purchase a full container of golf supplies from an overseas manufacturer at a better cost.
APTF performed a comprehensive risk assessment, including political risk, commodity risk and the ability to make entry into the destination jurisdiction.
APTF validated the supplier’s track record and production capabilities, performed an on-site supplier inspection to validate the supplier’s ability to produce the required quality and quantity of golf supplies.
APTF arranged the funding for the purchase order from the manufacturer and the client pledged the inventory as collateral to APTF.
APTF arranged the door pick-up through its international logistics partners, maintaining control and custody of the goods as they advanced through the supply chain.
APTF procured and placed an all-risk maritime insurance policy, where APTF was the first loss payee to protect its exposure.
The client received the finished products, making payment to APTF within 120 days as agreed.

The Conclusion

The process of APTF’s Purchase Order Finance solution was simple and straightforward and efficient for this client.

The client approached APTF with the opportunity to purchase a full container of golf supplies from an overseas manufacturer at a better cost.
APTF performed a comprehensive risk assessment, including political risk, commodity risk and the ability to make entry into the destination jurisdiction.
APTF validated the supplier’s track record and production capabilities, performed an on-site supplier inspection to validate the supplier’s ability to produce the required quality and quantity of golf supplies.
APTF arranged the funding for the purchase order from the manufacturer and the client pledged the inventory as collateral to APTF.
APTF arranged the door pick-up through its international logistics partners, maintaining control and custody of the goods as they advanced through the supply chain.
APTF procured and placed an all-risk maritime insurance policy, where APTF was the first loss payee to protect its exposure.
The client received the finished products, making payment to APTF within 120 days as agreed.

AP Trade Finance is a leading provider of innovative trade finance solutions for SMEs looking to expand their business operations globally. Follow us on LinkedIn.

Sign-up to our newsletter.

Get updates and info on all things Trade Finance.