Finetrading — Intelligent solution of goods purchases and consignment warehouses

A balanced financing mix is playing an increasingly important role for companies. Rating issues are becoming increasingly important. For this reason, many companies, especially SMEs, have become significantly more professional in recent years in order to place their financing on a broader basis and thus become more independent of banks. Innovative alternatives to traditional bank financing, such as leasing, factoring and finetrading, which is aimed specifically at SMEs and is still relatively new, have been making a steadily growing contribution to this for years. Finetrading not only increases the available liquidity and can be used flexibly. Rather, it can also lead to an improvement in balance sheet ratios.

In addition to leasing and factoring, which have been established on the market for some time, finetrading is still a young alternative to traditional financing and aims to make unused cash discounts available to SMEs and free up liquidity. Unlike factoring, finetrading is a purely commercial transaction that starts with purchasing and is based on a triangular relationship: A middleman, the finetrader, intervenes between the customer and the supplier. After the two parties have reached a commercial agreement, he acts as a new debtor and acquires the goods in accordance with the customer's order. While the goods are delivered directly to the customer, the invoice goes to the finetrader and is paid by him immediately.

The supplier benefits from the elimination of the risk of default and a predictable, rapid receipt of payment. The finetrader agrees with the customer on a payment term of up to 120 days, depending on the capital commitment period of the planned transaction. The company takes advantage of the cash discount and gains time to generate sales before paying for the ordered goods on the market. The customer alone decides how long to use this extended supplier credit. Until final payment, the ownership rights to the delivery shall remain with the Finetrading Company, which shall, however, grant the customer the right to process and further sell the delivery.