RE: Summary5 Oct 2020 11:31
Here yoy go niccolo, a post i did a couple of days ago.
I will also try to explain in layman's terms,
to start with you have take these points into consideration:
1. SYME is only available for larger businesses with inventory on their books in excess of £5m.
2. SYME does not deal with business that are struggling.
3. SYME Physically inspects your inventory. (So you can't lie about stock you hold) plus they look at all the risks to do with your inventory. (like depreciation, damage. insurance policy, warehouse, etc).
Now lets say a farmer has a 100 thousand cows, he needed to free up some of his inventory (cows) to raise capital (for more cows). If he went to the bank, say the cows are worth 50 million pounds the bank will only lend him 20 percent of that. And it would affect the farmers credit rating.
Now this farmer has the option to go to SYME who then owns the inventory (cows), although it never physically leaves the farm. The manufacturer can slowly buy the stock (cows) back at cost plus VAT and Supply@ME’s fee of between 6 per cent and 8 per cent.
So the farmer manages to raise 50 million pounds to buy or breed more cows. And Syme controls a Inventory with big demand and very little risk.
I hope this makes sense.
PoorInvester