Financing & Metal Leasing
We first work to understand what factors are most important to your precious metal financing. To achieve this, we collaborate with you to understand issues like whether you want to be exposed to metal prices, or hedge out price risk. What is the desired balance sheet treatment for the metal and related financing? Where is the metal located (e.g. in inventory, at suppliers, in a vault) and what is it used for (e.g. inventory, fixed assets, investment)? What form is the metal in (e.g. jewelry, bullion, certified coins, e-scrap)?
Armed with this information we work with you to structure the right combination of financing tools for your specific situation. While not an exhaustive list, the following are some of the core financing tools we use to help companies get the outcome they are looking for.
PRECIOUS METAL LEASINGGold leasing addresses the need to finance metal assets and also protects your profit margins from volatile price movements. By leasing precious metal you are effectively renting it from us. While leasing the metal, you can process it into finished goods, refine it into deliverable form, or whatever suits your business model.
We offer lease advances through physical delivery to you or your suppliers, metal transfers, and sale-leaseback trades. Our trading desk is always there to facilitate purchases and sales under your lease line so you can keep your lease balance aligned with your inventory levels.
Sector expertise - Companies in the jewelry manufacturing or wholesale space are active users of gold leases, as are those in the coin and bullion industry. Scrap aggregators active in spent autocatalyst and e-scrap markets benefit from leasing metal during the extended refining process. Many industrial manufacturing firms that use gold, silver, or PGM use leasing to fund their metal inventory and avoid metal price risk.
SELECT INVENTORY FINANCESelect inventory finance is a highly efficient tool for financing your raw materials and finished goods containing gold, silver, or PGM. With an ability to finance up to 100% of the metal content of this inventory, SIF is a powerful financing instrument. Like leasing, select inventory finance addresses your financing need and also transfers the metal price risk to us.
Sector expertise - Coin and bullion dealers are heavy users of this form of inventory financing. Strategic use of SIF can allow jewelry companies to fund inventory stockpiling in advance of the busy season. Industrial manufacturing companies use SIF to ensure ample on-site supply of raw materials, ensuring uninterrupted production flow.
SECURED LOANSBorrowing money against your gold, silver, or PGM is not a service you will find at many traditional banks. For those few traditional banks that do lend against precious metals, terms and advance rates are often unappealing. Conversely, here at Kilo Capital we are precious metal focused private credit lenders. Our deep knowledge of precious metal finance translates into sensible loan conditions and high advance rates.
Sector expertise - Coin dealers, jewelry companies, and scrap aggregators who prefer to hedge metal risk separately often benefit from using revolving loans. Institutional investors use secured loans to access liquidity while maintaining their long position in gold or silver.