Video Transcript: So normally when you think about finance; a good deal in finance; you think about a conservative deal, a deal that you can handle where you don’t run into trouble with the instalments. But in business, it’s a little bit different than in your private capacity. The example I was to use is a client who traded chrome ore. He had taken his business as far as he could with his own capital. And now we organised him an extra $10m. The math was actually quite straight forward; he paid roughly 12% per anum (in USD that’s quite a high rate) which breaks down to about 1% per month. On a trade, he made about 11% margin over roughly 45 days. The math was simple; all he had to do was satisfy himself that he was no longer going to make 11% on the new business but just under 10% – but the key is that the capital pays for itself. In trade finance, where you typically finance on the transaction at a time. You literally contact your funder and say I’ve got this sale; please pay for the stock, and then you pay them back when you get paid. It makes the math very neat because you can calculate your cost of finance per transaction and not per anum. But you really should try to think the same way about any capital you take; will it pay for itself by the business it generates?  

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