Prisim Finance

We are focused upon the energy sector. It is clear that there is a need for a significant level of investment in new energy solutions across the UK both in the public and private sectors. Renewable technologies supported by FITs need investment, energy savings solutions and investments are in demand to counteract rising prices and CRC liabilities. However since 2008 the availability of finance has been significantly constrained. Now with the tightening of public sector budgets there is even less money around to pay for good quality projects. Global Energy Advisory along with our partners have developed Prisim Finance to help organisations fund their energy investments.

Prisim Finance is the quickest and lowest cost method for good quality businesses to get funding to pay suppliers. The key attributes and how the funding works is as follows:

• Potentially two tranches of finance, £500 million each, one for the public sector and one for the private sector.
• Clients seeking to raise capital to pay external suppliers for a project apply through Prisim for the funding.
• Importantly there is no cost of funds to the buyers.
• Vendors seeking to offer clients a funding solution can propose Prisim.
• Funding is dependent upon on the bankability of the Buyer, this is determined through Prisim Energy.
• Key to Prism financing is that the supplier must agree to have their invoices discounted by a small amount. The rate will be Libor plus an agreed amount to cover the credit risk of the buyer. Cash advanced will be non-recourse to the supplier.
• The funds are allocated based on the buyer's invoice approval and disbursed directly to the suppliers.
• Once the program is established, the approval process is a relatively swift rather than months and is based upon the "bankability" of the buyer and the appetite of a large basket of banks' for the buyer's debt.
• The buyer and supplier agree payment terms and repayment is in accordance with this.
• Typically the payback period will be 1-3 years for sums of £50,000 to £20 million.
• The buyer needs to agree a Buyer Contract with our financial partner.
• The suppliers need to agree a vendor agreement through Prisim.
• To facilitate payment option we encourage clients to utilise the supply chain finance platform and Prisim load trading.

Another example of how Prisim Finance works:

A £400,000 funding requirement could be met by releasing the working capital from a £5 million supply chain. The buyer selects suppliers on their supply chain and nominates them onto the supply chain finance platform. Payment terms are commercially agreed between buyer and vendor in advance of information coming onto the platform. If suppliers' payment terms are extended from say 30 days to 60 days, this will release the working capital benefits to the buyer which can ultimately be used to fund projects. It is important to know that the vendors benefit from receiving early payments of their invoices 2 days from approval rather than 60 days. There is a small discounting charge applied to the vendors invoice to pay for this benefit.

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