Import/Export Finance

It’s important to consider all of your options to maximise your opportunities with today’s evolving import and export markets.

Import Finance

As an importer with overseas relationships, you may have to make upfront payments to ensure your suppliers are covered for the work they are undertaking.

Import financiers provide funding for the imported goods to ease the pressure of payment and keep your business relationships positive.
The funding is secured against either your invoices or the goods to be imported, and payment is approved by the funder using a letter of credit. Shipment of the products must be proven and the resulting documentation provided, as payment of the funding is conditional up until this point.

It’s common for some transactions to have multiple stages (processing, transportation etc.) which can add an element of complication. However, there are solutions for this too: performance bonds or bank payment guarantees.

One of many benefits of import finance is that this type of finance is off-balance. This means that they will probably not affect any existing relationships your company has with banks or bank facilities. This means that import businesses don’t have to take on angel investment or equity – and thereby lose a valuable share of the business – in order to facilitate growth.

Export Finance

Export financiers provide funding in a very similar way to how you would obtain an invoice finance facility – either in the form of an export factoring or export invoice discounting facility.

As an exporter you may have a number of invoices issued for clients overseas, with a potential of up to 100% of your invoice value to be obtained, depending upon your business situation.

Some financiers have expert, multilingual client managers who will be able to assist you with credit control.

A great advantage to export finance is that businesses can be much more open to new chances to branch out and sell to new customers and/or markets, while still maintaining cash flow and keep regular orders. This improved cash flow aids many areas of the business – you can reinvest money into the company or free up capital for wages or any other expenses.

Overseas trading challenges to consider

Laws, regulations, language and currency need to be kept in mind as these factors could all potentially impact your cash flow.

• Payment terms

Customers will usually require longer payment terms and generally take a long time to pay for any goods and services you have supplied.

• Local trade tax and government laws

Trade tax rates, service / product specification requirements and insurance costs are worthwhile considerations when trading overseas. In addition, note that certain import and export goods are subject to particular trade regulations.

• Currency and localisation

The strength of domestic currency and thus exchange rate fluctuations will impact your trade surplus or deficits. In addition to this, local business practices, marketing, contract terms and general communications revolved around your service or products will require specialist experience if they’re to be handled effectively.

Funding in three easy steps

1. Receive Specialist Guidance

Go through your export or import needs and get specialist guidance on the funding options available to you.

2. Meet a Suitable Funder

Once your specific needs have been identified, we will introduce you to the most suitable funder on our approved panel.

3. Speed Up Your Cash Flow

The funding agreement you receive can help alleviate importing payment pressures or allow you to get paid for exports earlier.

Related finance solutions

There are also other funding options available which can support and work in conjunction with your business activities:

Trade Finance

This can ensure you have the finance needed to pay suppliers for when a purchase order has been confirmed. Trade finance works with the financier providing funding on the understanding that a buyer-seller agreement has been made. Typically a letter of credit helps to ensure payment will be made and orders of finished goods will be fulfilled.

Invoice Finance

This releases your cash attached to invoices from your sales ledger more quickly so you can improve your cash flow and make potentially vital payment or reinvestment decisions. Invoice finance comes in two main forms, invoice factoring and invoice discounting, where the provision of credit control is the main difference. You can gauge how invoice finance could help you with our calculator above.

Get in touch

We know the most suitable and reputable export and import funders in the market to help manage the fine details of trading internationally. After a successful introduction, you will be able to concentrate on doing what you do best – running your business. Fill in the quote form by using the button below and get speaking to a consultant about how our services could help your business grow.