Bibby Financial Services (BFS) has awarded a £9.35mn credit line to England-based company SBZ Corporation to help it finance more raw materials from China and the Far East.
The new funding provides a mixture of invoice finance, trade finance and foreign exchange (FX) finance at £7mn, £1.5mn and £150,000 respectively.
SBZ is a global manufacturer, supplier and distributor of additives, markers and speciality chemicals for the oil industry, which has in the past worked with European suppliers. However, Brexit has meant the company is now increasingly looking further afield for more competitive pricing. Such orders not only have longer delivery times of around six to eight weeks, but payment is also required upfront.
“As a result of the EU referendum and the fall in the pound, we have seen our costs go up as we import a large proportion of our raw materials. At the same time, we have tried our best to keep our prices the same for our customers,” says SBZ chief executive Laurence Holder.
SBZ is opening a new purpose-built blending plant at its facilities in January next year. The financing will support the growth of this new capacity by allowing the company to pay its suppliers upfront while remaining in positive cash flow.
Meanwhile, the final component to the funding package, the FX facility, will allow the business to buy in China while trading in US dollars.
“This is a great example of how we can work with businesses to structure deals that not only support their short-term goals but their long-term ambitions too,” says director of specialist finance at BFS, Paul Fraser.
“SBZ was initially only looking for additional buying power, but by discussing the business’s needs and developing a keen understanding of its ambitions, we were able to put together a suite of products to help it realise its growth.”