Finance for Jewellery Production

Jewellery products can be for couture, custom, costume, or handmade markets, as well as high-street and mass market brands, allowing entry into the business at many levels. But although  techniques used in jewellery making date back thousands of years a revolution has come to the industry.

Your jewellery business may need computer aided design.  Your works may be milled from wax or grown in resin with high tech 3D printing driven by complex software.

Classical techniques like stamping or casting have been joined by new techniques such as laser or CNC manufacturing. Many volume manufacturers are using computerised polish systems rather than hand finishing.

While traditional hand skills remain valuable, the new approach to jewellery manufacture is creating new designs that were impossible by the old methods and driving down costs.

But for you to take advantage of the possibilities of the new technology requires investment.

Your funding options

It is essential to do your cashflow forecast when preparing to launch a jewellery business Material costs are high and you will need secure premises as well as a range of machines to set up in production.

Fortunately, there are funding options which can help you finance your jewellery production operation.

The right funding option can help you:

·        
 Acquire equipment and assets

·         Set up a new jewellery manufacturing operation

·        
 Buy into an existing manufacturing business

·        
 Acquire premises

·        
 Provide working capital

·        
 Finance growth

·        
 Deal with tax

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Acquire equipment and assets

You will need a full set of hand tools, with scales and basic bench equipment. You will also need casting, engraving, forming and polishing and finishing equipment, together with scales and testers.

If you are looking at cutting edge techniques, you will need a computer with suitable software, and a 3d printer.

Asset finance - hire purchase and leasing - can help put the equipment you need within your reach.

There are several types of asset funding for new and used assets.

Hire Purchase or HP

HP lets you spread the cost of buying equipment you will use for the long term. Many of the items you will use in the production of jewellery will be capable of delivering long service, and will be ideal for Hire Purchase. It can also be the most appropriate solution for items such as safes.

Hire Purchase arrangements generally allow you to spread the cost of buying equipment between 12 and 72 months. You pay a deposit plus fixed monthly instalments for the agreed term, after which the assets become yours.

You may also have the option to structure your payments to fit your projected cashflow. For example, you can reduce your regular payments by agreeing to pay a final lump sum, known as a balloon payment, when your production is fully operational, and revenue is coming in.

Equipment manufacturers and dealers will often offer HP arrangements for larger items. These can sound very attractive, and can even include 0% finance options. While these may look worthwhile, at Rangewell we have found that there can actually be hidden costs. You may be able to save money by arranging finance yourself.

See how we can help you beat 0% finance deals<link>

Finance and operating leases

Leasing works like rental agreements. It can let you spread the cost of equipment with no upfront payment - you can pay for your equipment from the income it generates each month.

When equipment becomes obsolete, or your production process changes, you can simply return it to the finance house at the end of the lease. This makes it simpler to adopt the latest technology - helping your business maintain a competitive edge.

High tech equipment, such as computers and 3D printers may cost several thousand pounds, and are often funded by lease arrangements.

Find out more about asset funding. <link>

 

Set up a new manufacturing operation

Equipment
 will not be your only cost if you are ready to set up jewellery manufacture. As
 well as secure premises you will need marketing and a website to help you
 find customers.

Many  traditional lenders are reluctant fund businesses which can’t demonstrate an  existing record of success. This can present a barrier for start up ventures.
 At Rangewell we can help you find financial solutions from lenders who can
 share your vision, and who can help you find the funds you need to support
 your start-up.

Find out more about start-up finance <link>

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Buying an existing jewellery manufacturing business

Buying an existing jewellery manufacturing business could offer established products and a customer base, and existing production facility, and the potential to generate profits from day one. providing a short cut to success. The value of the business may depend on its turnover, the assets and production equipment, and the cost of acquisition may be high.

There are several ways to raise the necessary funding. A loan secured on assets you already own such as your home could be one answer, while another is ‘jigsaw’ funding. This is a bespoke finance package, made up of several loan types and tailored to your needs.

Find out more about funding for buy ins and buy outs <link>

Funding for premises

Premises will be essential for your jewellery manufacturing  business. You will need a secure work area, and you may
 need office space.

Leasing a suitable industrial unit can provide the simplest option. We can provide solutions for a deposit if you want to lease your  premises.
 <link>

 However, once established, your
 business might be able to buy suitable premises with a commercial mortgage.
 It can help decrease your monthly outgoings, and provide a valuable asset for
 the future.

Remember,
 if you already own your premises, a commercial mortgage might be a
 cost-effective way to raise funds to use elsewhere in your business.

Find out
 more about a commercial mortgage. <link>

Working
 capital

All
 manufacturing businesses are like to face issues with cashflow. Customers
 often expect 90 days credit - while suppliers are more likely to demand
 immediate or even upfront payment. With the high cost of your
 supplies, the problem of cashflow may be particularly pressing.

We can provide solutions to help you deal with cashflow shortfalls.

Revolving credit

Overdrafts are a traditional form of finance you may be able to arrange from your bank - but banks may be reluctant to provide overdraft facilities at all, and rarely to the scale you might need as a manufacturer.  Revolving credit facilities can provide an alternative, providing a line of credit from a lender, with an agreed limit that you can call on when you need it. You only pay for the money you take out, and as the facility is provided by an independent third party, your bank credit arrangements will not be affected.

Working
 capital finance

Staff and suppliers  will need paying while you  are waiting for payments from your customers, and supplies will need to be
 bought in. Working capital finance is a loan designed to cover your  all operating expenses, from staff costs to
 supplier bills at times when revenue is short, such as in the early stages of your business is seasonal. It is usually repaid in the short- to medium-term.

Invoice  finance

Retailers in the jewellery sector may take 90  days or more to pay you, causing problems for your business. Invoice
 factoring and discounting can help ensure payments keep pace with the work  you do, by bringing you cash virtually as soon as an invoice issued.

·        
 Get 90% of invoice value as soon as you bill
 your customers.

·        
 Cleared funds can be in your account the day
 after you invoice.

·        
 You can retain control over your credit control
 – your customers need not know you are using the facility.

·        
 The level of funding you can call on will grow
 in relation to your level of outstanding invoices – making it ideal for
 funding growth.

·        
 Injects capital into your business, without
 borrowing or sacrificing equity.

There are several types of Invoice finance solutions to consider. Find out
 more about invoice finance <link TBA>

Stock and inventory finance

Stock and inventory
 finance allow you to use the contents of your stockroom as the basis for cash
 advances. If you have a stock of finished products waiting to be dispatched,
 it can represent a considerable amount of money.  Stock and inventory finance can use the cash
 tied up as security for a loan which can bring in more materials and to
 continue production while you wait for buyers to come forward.

Find out more about Stock
 and inventory finance <link>

Growth  Finance

When your  jewellery designs prove successful you will want to increase your
 manufacturing capacity. Buying in new machinery and taking on skilled people can
 help you increase your production capacity. This expansion will almost
 certainly require finance.

Most lenders are happy to lend on your past performance. Growth finance can help,
and is a special type of lending designed to finance growth.  While most
 forms of lending are based on your trading history and record of
 profits, but it may be possible to arrange Growth Finance based on your
 profit projections.

Get our help finding the most appropriate lending for your needs. <link>

Basic business loans

There are two types of basic business lending, which can be used for any business
 purpose. Unsecured business loans can be suitable for smaller sums and
 usually allow you up to 5 years to repay.

Secured loans are ‘secured’ because the lender will require security in case you
 cannot pay the loan back. This could be your home, or your business premises.
 They can be used to borrow large sums of money, of £250,000 or more

Tax funding

Quarterly VAT or annual tax demands can cause serious  problems with your cash flow. Tax loans help you to spread the
 cost of your tax demands into affordable monthly payments.

·        
 Better control of cash flow

·        
 Predictable monthly payments

·        
 Quick and simple to arrange

·        
 Avoids penalties

Find out how a tax loan could support smooth cashflow <link>

 

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Export finance

The export market is huge, but presents substantial risks as well as very large additional funding needs. There are solutions specifically designed for the export market which can remove many of the risks of working with customers overseas, and which can provide funding for every step or a large order, from bringing in supplies and delivery.

See how we can help support your export initiatives.

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How we help you capitalise jewellery manufacturing

At Rangewell, we have experience across the entire manufacturing industry. It includes a detailed  understanding of the jewellery industry.

It means we can help you find the financial solutions you need to capitalise your business, whether you want to fund capital expenses, working capital or growth.

As well as conventional finance products, we can help you find Alternative
 Funding, using new loan providers and styles of funding. We know the
 lenders who can offer the most competitive rates for the sector. Whether you
 have a straightforward finance need, or require a complicated ‘Jigsaw’
 funding plan made up of a combination of products, we can work to find the
 answers that are right for you and your jewellery business.