Bringing In Goods From Overseas? Consider Import Financing


Do you have friends or colleagues that live in another country and want to do business with you? Do they have inexpensive products that you can buy, dramatically mark up the price, and make a nice profit? The problem is that you don’t have the money to bring the goods here. The solution to your problem is at hand. If you want to import products from overseas, you may want to look into import financing as a way to grow your business.

Starting a small import business can be profitable for you and your overseas business contact. Especially if the goods will be coming from a country where it literally costs pennies to make the product. There are alternate ways to get funding for your import venture since it can be difficult to get bank loans. You may want to factor your accounts receivable. This means that you would sell your accounts receivable accounts to a third party, otherwise known as a factor. The factor could be a commercial finance company or an accounts receivable financing company. Your company could receive 80 to 90 percent of the face value of the accounts minus a two to three percent service fee. You will receive a check in advance from the factor that you can later use for import financing.

You also have the option of purchase order financing, which is similar to accounts receivable factoring. In this scenario, you would sell your purchase orders to a commercial finance company. They would get the money from your customers after the products are made, keep a portion of the money, and pay you the rest. Purchase order financing can be expensive, but it works very well. It’s more expensive than bank loans, but when banks aren’t lending money, this is the next best thing. If your profit margin is high enough on the products that will be imported, purchase order financing is the import financing option for you.

If you have current inventory, then you can get a loan to fund your import venture. Just like purchase order financing, inventory financing is also expensive. When you use your inventory to get a loan, you’ll be able to buy the imported products that your customers have been clamoring for. This type of financing allows you to increase your inventory without having to dip into your cash flow.

Importing products to resell to your customers can be very rewarding for everyone involved. Having the necessary funds to finance your enterprise can take your company to the next level. Import financing enables your company to grow to the size that you have envisioned.