Two corporate finance specialists have been headhunted to run Liquidity Import Finance, a new outfit set up to provide cash to businesses that import goods for UK customers.
Stuart Relton and Hugh Francis, both formerly with larger rival Bibby Factors, will help West Midland companies who rely on manufacturing and trading relationships with the Far East and elsewhere.
It operates by providing its customers with cash against the security of a delivery of goods to the UK. Liquidity Import Finance is the new trade finance arm of Liquidity, a Birmingham-based sales finance business run by an expanding team of specialists led by former Lloyds TSB executive David Totney.
Mr Relton said: "More and more West Midland businesses operate in partnership with manufacturers in low labour cost countries like China and the Far East.
"For importers, cash flow is a key issue in relation to the finance to bridge the gap between completion of manufacture and shipment on the one hand and ultimate payment on the other.
"Effectively we buy the goods against the security of confirmed documents and we retain ownership as security for the finance provided by the deal until payment is ultimately made."
Mr Relton acknowledges that some risk is involved but says this can be managed through normal credit procedures and an understanding of the nature of the trading involved.
Trade finance is widely available from major banks but Mr Relton says there is a real need for the kind of flexible approach that Liquidity Import Finance is able to provide.
He went on: "There are many different kinds of documentation and many clients really require a tailor-made approach.
"Trade finance can be offered alongside other cash sources such as sales finance, but it can also stand on its own.
"We are open-minded about the business sectors we are prepared to finance. We are funding trade in clothing, components, accessories and plant and equipment.
"We are seeing a substantial amount of interest already from suppliers of clothing and manufacturing components, which are often imported from the Far East and those importing plant and equipment, often from Italy.
"The trend to outsourcing supplies from overseas has gathered pace as the UK has moved away from volume manufacture and towards innovation and the provision of complete and value added solutions to customers' needs.
"Many West Midland companies are now working to long-term strategies based on partnerships of knowledge-based contribution from the UK, and imported components and assemblies. This trend is going to continue.
"The only real restriction is our trade finance must be linked to specific schedules or confirmed orders and we only back trade in generic goods, which have resale potential if something goes wrong. This leaves us with a large market and we are very optimistic."