Hectocorn worked with a major independent steel trading business, helping them set up a combined trade finance and invoice discounting facility. The goal? Fuel their rapid growth, give them stronger leverage with suppliers, and free up cash that was stuck in receivables and stock.
This business was growing fast. Orders kept piling up thanks to a surge in infrastructure projects and new international customers. But their old financing just wasn’t keeping up—it left them squeezed for cash between paying suppliers and waiting for clients to settle up.
We stepped in to build a funding structure that fit the company’s trading rhythm. We negotiated with lenders, navigated a tricky supply chain market, and secured reliable institutional funding.
Client Requirement
The client needed a capital solution to:
- Unlock working capital tied up in receivables and inventory
- Handle bigger order volumes without slowing down procurement
- Strengthen their negotiating position with global suppliers
- Offer flexible funding that grows with turnover
- Bring scattered short-term loans under one roof
But it wasn’t just about getting more cash—they wanted their cash flow to match their growth, keep control over customer relationships, and stay discreet.
Outcome
We secured a working capital package combining trade finance and invoice discounting, totaling £3 million.
Here’s what the facility included:
- £2,000,000 invoice discounting facility
- 85% advance rate on approved invoices
- 40% customer concentration limit
- Up to 120 days funding from invoice date
- Multi-currency (GBP/EUR)
- Optional credit insurance (100% UK, 97% export cover)
- Fixed and floating charge security
This deal unlocked cash for procurement, tied working capital to growth, and gave the business an edge with suppliers by proving they could pay on time. We also simplified their borrowing and made sure the facility could scale as they grew (with turnover projected around £8 million). The process went smoothly, with institutional lender backing, so the business got quick access to funds and didn’t miss a beat.
Hectocorn Engagement
We dug into the client’s trading cycle, customer mix, and the quirks of their supply chain. Then we targeted lenders who really understood trade and receivables, especially those familiar with the ups and downs of industrial commodities. Our role covered:
- Building a solid funding presentation
- Reviewing commercial and financial models
- Screening and negotiating with lenders
- Coordinating due diligence and paperwork
- Keeping client details confidential during the process
Several lenders were interested. Our structured approach helped us negotiate strong terms tailored to how the business actually operates.
Impact
With this facility, the business:
- Freed up cash stuck in debtors and inventory
- Boosted procurement capacity and landed bigger global orders
- Entered new export markets with confidence
- Improved cash-flow visibility and financial discipline
- Built a platform for sustainable, scalable growth
Now, they can take on larger orders, pay suppliers faster (which means better terms), and expand into new European markets without hesitation. With working capital unlocked from receivables, they have the flexibility to invest in inventory when the timing is right—instead of waiting for client payments to come in.
This project shows how Hectocorn helps trading businesses design invoice finance solutions that fit their operations, offering not just capital, but a working capital structure that supports real, lasting growth.
Want to talk through trade finance or invoice discounting options for your trading or supply chain business? Reach out to Hectocorn. Our team helps growth-stage companies unlock working capital, stay flexible, and keep control over customer relationships.
Key Deal Highlights
Facility type: Invoice Discounting with Credit Protection
Facility limit: £2,000,000
Projected turnover: £8.1 million per year
Advance rate: 85% of approved invoices
Funding period: 120 days from invoice date
Currencies: GBP and Euro
Concentration limit: 40% per customer
Discounting fee: 2.3% above UK Base Rate
Credit protection: 100% UK, 97% export
Lender: HSBC Invoice Finance (UK) Ltd
For more on working capital or trade finance solutions for cross-border businesses, get in touch with Hectocorn.
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Frequently Asked Questions
Invoice discounting is confidential — customers remain unaware that invoices are financed, and the business continues managing its own sales ledger and credit control. Factoring is disclosed, with the finance provider managing collections directly from customers. For businesses where customer relationships are sensitive or where credit control is a competitive advantage, invoice discounting preserves operational autonomy while releasing working capital. In commodity trading, confidentiality is typically preferred to maintain supplier and customer relationships.
Credit protection insurance protects against customer default, covering a percentage of the invoice value if an approved customer fails to pay. In this facility, UK receivables had 100% cover (subject to a £1,000 first loss per customer), while export receivables had 97% cover. This effectively outsources credit risk assessment and provides balance sheet protection, enabling businesses to pursue growth opportunities with new customers while maintaining downside protection against bad debts.
Absolutely. Unlike term loans or overdrafts with fixed limits, invoice discounting scales automatically with turnover. As sales increase, more invoices are raised, and more funding becomes available. This makes it particularly suitable for growth-stage trading businesses where working capital demand accelerates faster than conventional lenders can accommodate. The facility capacity grows proportionally with business activity, removing the constraint of fixed borrowing limits.