How do you fund the manufacture of goods when your overseas customer takes three months to pay?
When Ecospin found itself losing orders because it needed cash up front to fund the build, the future looked grim. How could Ecospin find a way of satisfying orders while giving customers time to pay?
Ecospin manufactures the Raptor – an innovative three-wheeled electric vehicle. Aimed at the law-enforcement community, it’s the only road-legal vehicle of its type and has been adopted by police forces and security firms around the globe. Ecospin exports virtually all its production.
A product as technologically advanced as the Raptor is expensive to build. This was a constraint for both Ecospin and its customers. Paul Loomes, Ecospin’s Managing Director explains:
“The Raptor’s USP is its Type Approval; this is what makes it road legal. However, to get Type Approval cost £200,000; we managed this without investment but by the time we had an approved product to build we had no money left in the company.
“Having no cash in the business meant we couldn’t fund build costs. So on every order we had to ask for 50% up front. This was losing us business.”
This is clearly a difficult sell to a customer. It takes around twelve weeks to fulfil an order so asking a dealer in Singapore to stump up £25,000 on a £50,000 order three months before receiving anything is bound to cause consternation. Paul was concerned that without a capital injection from an investor Ecospin’s future looked bleak. Then he found a way forward.
“I was describing the problem to a friend, Stuart Garner at Norton Motorcycles. Stuart uses URICA, he explained to me how it works and it sounded like just what we needed. I set up a meeting with URICA and we’ve never looked back.
“A recent order from a new dealer in Mexico is a great example. The opening order was for $191,000. We put it through URICA and once approved I know the money will appear in our account immediately while the customer doesn’t have to pay for three months. This means we have the cash to pay our suppliers and fulfil the order, and by the time the customer has to pay the goods have been shipped. Without URICA we might lose an order like this.
“For any business that is exporting URICA really is the solution. You can’t put a value on peace of mind but that’s what the URICA solution gives us. We know we’ve got money in the bank and we know the customer is solid because URICA has checked them out.”
See more on YouTube:
https://youtu.be/7Ot8qqnArIo https://youtu.be/zx73qOC1K0I https://youtu.be/032jT2iZULY
https://youtu.be/Vl-sfDqETmQ https://youtu.be/XqTW2OAEkEg https://youtu.be/hL2hFsekLxI
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