Capital loan but with delayed repayment start date?

[welcomebrand]

Trying to wrap my head around planning for growth but looking for suggestions on how to potentially get some capital to allow for purchasing more inventory but where said inventory is not always reliably available on exact timescales.

The "trouble" I feel we're in at the moment is that we're just spending what we earn which is ok for our size but to get any bigger we need some more capital and a decent amount like 3-400k perhaps which we can spend quite easily on inventory but a vast majority of it wouldn't be ready for at least a year and in some cases more like 1.5 years but starting to pay off capital immediately while we don't have the stock levels to sell would be borderline impossible as I'd perhaps also consider some of that money would go to an agency to help us with marketing/growth etc but we couldn't afford it right now.

Is there such a thing as a delayed repayment start for loans or does anyone know a better way we can inject a larger amount of money into our business for stock we won't have for a long time?

Cheers!

 

[Mark T Jones]

A lot will depend on the nature of the contract and the underlying credit of you and the end customer.

@Ian J might have some ideas.

What I would say is - on the face of it, you will need to at least be paying the interest as it accrues (or creating a huge rolling debt) and will probably require some solid security.

 

[Ian J]

I'm afraid that I don't know of anything that might be suitable as the time taken to produce the goods would be far to long for normal trade credit finance facilities and I'm guessing that the product is also highly specialised too. Sorry that I can't help

 

[Paul Kelly ICHYB]

Without knowing the business or products, it is hard to give advice, however, PO finance might be an option.

You get a big order from a customer. You have a supplier that will make it for you. Finance company underwrites the purchase based on credit checking the client and getting a firm (possibly irrevocable) order. You get the selling price minus a finance charge.

If the products are coming from a singe supplier, you could get a transferable l/c from the client (on preferential pricing) and use that to pay the supplier, keeping what is in the middle.

 

[Mark T Jones]

Without knowing the business or products, it is hard to give advice, however, PO finance might be an option.

You get a big order from a customer. You have a supplier that will make it for you. Finance company underwrites the purchase based on credit checking the client and getting a firm (possibly irrevocable) order. You get the selling price minus a finance charge.

If the products are coming from a singe supplier, you could get a transferable l/c from the client (on preferential pricing) and use that to pay the supplier, keeping what is in the middle.

PO finance is what Ian does - and he's said it won't work because of the timescales involved & the nature of goods.

@welcomebrand - given the substantial sums involved - far from 'take a punt' levels - you really want some dedicated advice, based around your own specific circumstances. The problem you face is that the type of broker who offers a 'free review' at this level will be determined to sell you something. I'm not offering my services, but if I did, it would definitely be on a fee basis (Probably refundable against any deal done.

In the meantime, here is the stuff that is likely to matter:

- Your trading history.
- The customer
- The contract (both ends)
- The nature of the goods.
- Margins

And if those things don't stack up 100%, available additional security.

 

[Paul Kelly ICHYB]

I am interested as to what has a 12-18 month lead time (outside of livestock/marine!)

 

[welcomebrand]

I am interested as to what has a 12-18 month lead time (outside of livestock/marine!)

Japanese knives - particularly from smaller workshops/individual blacksmiths.

We've had some on order with one workshop since March and unlikely to see them until early 2026. This is a large part of the issue with trying to get stocks basically. Some companies can provide things in a few months but often with a lot of them they don't make things specifically to order and it's a case of placing larger backorders for everything we'd want (eg, several different types of knife in a certain steel) and then over time they make one or two of that type of knife in a batch and they're sent to us but getting even remotely precise lead times from a lot of them is incredibly difficult.

 

[welcomebrand]

PO finance is what Ian does - and he's said it won't work because of the timescales involved & the nature of goods.

@welcomebrand - given the substantial sums involved - far from 'take a punt' levels - you really want some dedicated advice, based around your own specific circumstances. The problem you face is that the type of broker who offers a 'free review' at this level will be determined to sell you something. I'm not offering my services, but if I did, it would definitely be on a fee basis (Probably refundable against any deal done.

In the meantime, here is the stuff that is likely to matter:

- Your trading history.
- The customer
- The contract (both ends)
- The nature of the goods.
- Margins

And if those things don't stack up 100%, available additional security.

Thanks Mark,

Appreciate the input. I wouldn't necessarily be looking to get any sort of free review and figured a broker of some sort would be the answer and it's something we'd willingly pay for to speak to the right person who can help us with relevant advice and guidance. We're definitely past the seeking freebie stage of life and business

I think "regular" capital financing is what we're looking for which we've done already in the past with the simple PayPal captial which is easy but that's one where the repayment just starts on day one and for a much smaller and more manageable amount and what we somehow need to do is bridge a gap between being able to pay for more inventory but that won't arrive so we can't sell it yet and then obv would be unlikely to afford to pay the loan initially until it's here.

Feels quite frustratingly catch22 trying to grow at the moment.

In terms of history, business info etc that's fine and additional security would also be available one way or another if everything else stacked up.

 

[Mark T Jones]

Thanks Mark,

Appreciate the input. I wouldn't necessarily be looking to get any sort of free review and figured a broker of some sort would be the answer and it's something we'd willingly pay for to speak to the right person who can help us with relevant advice and guidance. We're definitely past the seeking freebie stage of life and business

I think "regular" capital financing is what we're looking for which we've done already in the past with the simple PayPal captial which is easy but that's one where the repayment just starts on day one and for a much smaller and more manageable amount and what we somehow need to do is bridge a gap between being able to pay for more inventory but that won't arrive so we can't sell it yet and then obv would be unlikely to afford to pay the loan initially until it's here.

Feels quite frustratingly catch22 trying to grow at the moment.

In terms of history, business info etc that's fine and additional security would also be available one way or another if everything else stacked up.

What I will do as a freebee is take a look at the information (as above) just to give pointers (but not detailed/formal advice)

If you want to DM me info I'll have a shufty...

 

[Mark T Jones]

I will add, for others to see, it may be a question of breaking the deal down into multiple facilities, to provide both 'hard funding and flexible.

 

[welcomebrand]

What I will do as a freebee is take a look at the information (as above) just to give pointers (but not detailed/formal advice)

If you want to DM me info I'll have a shufty...

thanks Mark, dropped you a message