Import Finance
Import finance can allow businesses to target those large orders they may not be able to finance.
Import finance or trade finance allows importers who then sell on to other businesses to finance the entire transaction. This is particularly useful where you receive a purchase order from your customer who expects credit terms yet your supplier requires the comfort of payment.
We have several invoice discounting and invoice factoring companies who can issue an LC (letter of credit) to your supplier. Through a combination of trade finance and invoice finance it allows them to pay your supplier in full (including any VAT and freight) and finance the transaction right the way through to your end customer paying for the goods.
Import finance can allow you to take advantage of large orders that you otherwise may lose out on. As well as providing financial liquidity it can also remove a lot of the uncertainty and risk associated with purchasing goods from foreign suppliers.
By using a form of trade finance you can also protect yourself against non-delivery of goods or the delivery of sub-standard goods.
At Smart Factoring Quotes we are experienced with dealing with importers and are aware of the issues they face. Banks typically require cash cover or tangible security before they will issue a letter of credit on your behalf. Our lenders are happy to issue an LC on your behalf as long as you have a confirmed order from a credit worthy customer.
Import Finance Case Study
We had a client who was sourcing branded merchandise on behalf of a major coffee chain. The business had been developing gradually when suddenly due to a fall out with another supplier the demand from the coffee chain increased dramatically. Our client was obviously delighted but at the same time concerned because they could not finance the transaction.
Their supplier in the Far East wanted a letter of credit and the bank were unwilling to issue this without cash cover from the client. This was not available.
When the client approached us they had almost given up on being able to service these ongoing large orders. Fortunately, Smart Factoring Quotes were able to put in place an import finance facility that issued an LC to the supplier. When the goods arrived and were delivered the invoice factoring facility repaid the LC and when the end customer paid the factoring facility was repaid.
Thanks to the import finance the business was able to triple turnover and increase profits dramatically.
If you would like to know more about import finance call us on 0845 863 0738 or email us .
