21.09.2015 © LENZ Finance Management KG - 1 Sourcing and Financing Service of LFM Presentation for...

19.04.23 © LENZ Finance Management KG - www.lenzfinance.de 1

Sourcing and Financing Service of LFM

Presentation for Ghanaian DelegationIHK Chamber of Commerce & Industry, Karlsruhe

13th April, 2015

Presented byWolfgang Lenz, General Partner of LENZ Finance Management KG


Introduction

John Ruskin:

“There is hardly anything in the world that someone cannot make a little worse and sell a little cheaper, and the people who consider price alone are that person's lawful prey.

It's unwise to pay too much, but it's worse to pay too little.

When you pay too much, you lose a little money - that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do”.

John Ruskin (1819-1900)English writer, art critic, and reformer


Introduction

In my own words of today:

He, who buys cheap, buys twice.

He, who buys German goods, buys quality.

He, who uses LFM Services does not pay too much.


LFM Services in a nut shell:

A) Analysis

LFM offers its skills and contacts to source goods from Germany

LFM uses its skills and knowledge to arrange for finance.

LFM analyses the eligibility of Ghanaian importers to German finance.

LFM does so by comparing their financial capacity with purchase needs.

LFM estimates a possible credit volume and finance term.

LFM issues a CER (Credit Eligibility Report) about the result of analysis.


LFM Services in a nut shell:

B) Consultancy

LFM offers its consultancy in case of positive results.

LFM agrees about a consultancy contract with the Ghanaian importer. LFM does research about possible German suppliers.

LFM checks about the financial and market standing of suppliers.

LFM proposes capable suppliers and arranges finance.

LFM keeps up the interest of Ghanaian importer and aims for long-term relationships.


Product particulars:

The product is based on credit insurance Credit insurance is available for goods manufactured in Germany.

Credit insurance is available in a variety of options.

The type and use of goods are one criterion for options.

The size and term of finance is another criterion.

The tune of purchases is a further criterion.

Remark: Eligibility of foreign goods purchased in Germany was suspended in December 2014.


Product particulars:

Another version is based on Letter of Credits (L/Cs) L/Cs are available from Ghanaian banks.

L/Cs require credit agreements with banks.

L/C agreements do not necessarily require high cost.

L/C based finance can cut cost significantly.

L/C based finance usually extends up to 180, exceptionally 360 days.

The choice of the right bank is important for L/C business.


List of Goods:

There are no restrictions by type of goods, unless military

Consumer goods Long-lasting consumer goods

Components, spare parts

Agro-industrial products

Passenger cars

Quasi-capital goods: Vehicles, earth moving equipmentCapital goods: High value machinery & equipment for production


Finance Terms:

Finance periods differ by type of goods

Consumer goods, up to 180 days Long-lasting consumer goods, up to 360 days, exceptionally up to 2 years

Components, spare parts, up to 360 days

Agro-industrial products, up to 360 days

Passenger cars, up to 3 years

Capital goods/ Quasi-capital goods, up to 5 years


Finance Quotas:

Finance quotas differ by period of finance

Up to 360 days 100 % of the purchase value is eligible

Finance periods beyond 360 days require a cash quota

Cash quotas are minimum 15 % of the purchase value

Cash quotas can be increase to overcome restrictions by other rules


Repayment terms:

Repayment terms differ by period of finance

Up to 360 days flexible, from monthly to bullet payment.

Beyond 360 days, 15 % advance payment, 85 % in up to 10 instalments.

First instalment payable 6 months after delivery / readiness for operation.

Half-yearly payments are the usual case; shorter intervals allowed.


Final remarks:

Only private sector business

LFM is active in Ghana since 2007.

LFM is exclusively contracting with the private sector.

LFM has customers in different industrial sectors.

LFM is dedicated to Ghanaian business.

LFM only contracts, if there is conviction about feasibility.


Remember:

Do not hesitate to buy German goods.

There is finance available for your business.

Make quality your passion.

LFM assists to realize your targets.

You are welcome

21.09.2015 © LENZ Finance Management KG - 1 Sourcing and Financing Service of LFM Presentation for...

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