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Jana Pfeiffer May 28, 2020 2 Minutes
Categories: Finance - Categories | Financing Guide

If the product range is well positioned and the number of customers is increasing, this also reduces the stock and new goods need to be ordered. If these cannot be financed by the sale of previous goods, a quick and simple Financing optionin order to be able to pre-finance the orders. In addition, bottlenecks can occur due to seasonal fluctuations, sudden strong company growth or other factors. For such cases, a short-term liquidity improvement by means of a Loan is necessary.

In this series, we will explain what options are available and what advantages and risks the respective financing methods entail.

Finetrading purchase financing  

Finetrading is an alternative form of Purchasing- or Pre-financing of goodsin which the finetrader acts as an intermediary between the supplier and the trader. Finetrading is therefore legally speaking not a credit transaction but a commercial transaction between three parties (supplier, trader, finetrader). The trader negotiates the terms of delivery, prices and other conditions with his supplier in advance. The order itself is then placed by the finetrader for his own account, but delivered to the merchant's destination. As soon as the merchant has approved the invoice, the finetrader pays the supplier - possibly using a cash discount. The seller in turn receives from the Finetrader an extended term of payment or the possibility of paying his debts by instalments.

Pre-financing of goods with fulfin 

fulfin, the pioneer of digital financing providers, has developed a new type of fulfillment financing especially for e-commerce sellers, which is called Purchase Financing .Compared with Finetrading, the Pre-financing of goods by means of fulfin entails no intervention in the relationship between supplier and dealer - the dealer negotiates independently with the supplier. Furthermore, it is possible to negotiate via the fulfin credit app easy, online and the loan application is quick. In addition to the actual products, future cash flow, a personal guarantee or global assignment can also be used as collateral. 
Furthermore, in the case of fulfin, subsequent financing in the sense of a Inventory Financing: is possible. This means that the costs incurred can be covered regardless of previous orders and the previous invoice total. In addition, the fees incurred in the context of the repayment are usually lower than the ones with the Finetrading.

fulfin vs. finetrading - 3 advantages at a glance 

  1. The Pre-financing of goods by means of fulfin does not affect the supplier-dealer relationship. Since fulfin does not act as an intermediary in this financing solution, there is no need for a contract amendment or even a new contract with the supplier. The dealer negotiates general conditions as well as terms independently with the supplier and concludes a contract with him without fulfin being involved in this process. 
  2. In the case of fulfin, actual goods or future cash flow may serve as collateral, but the capital does not necessarily have to be used for the Financing of Goods .The newly gained liquidity can serve as an improvement for general operating funds or be used for the realization of long-term projects. In this way, fulfin guarantees flexibility and adapts to the circumstances of its customers. 
  3. In contrast to the Finetrading With fulfin's financing solution, the goods can be financed in advance as well as afterwards. Liquidity can be released from goods that have already been purchased, whereas a Finetrader can only finance the actual purchase of goods in advance, since an invoice that still has to be settled is required.

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