Breaking into export markets is a huge step forward for any manufacturer: the possibilities involved in selling to the world are so much bigger and more profitable than simply working domestically.
Exporting is also good for the Australian economy, but even the best companies need access to suitable funding and support in order to be able to make the leap and start selling their goods overseas.
The Cash Flow Implications of Exporting
While breaking into foreign markets is a major milestone for any company and once you have started exporting you won’t look back, there are short-term financial implications for manufacturers who are selling abroad, which can be a real stumbling block without proper consideration and funding in place.
In particular, manufacturers trading overseas face a larger cash flow gap because the order takes longer to fulfil before they can issue an invoice and wait for international payment. What’s more, there are additional shipping costs and bureaucracy to consider, and the extra risk of working with far-away buyers outside of your familiar jurisdiction and culture.
Funding Options for Manufacturing Exporters
Given the lucrative possibilities and business prestige associated with being an exporter, some manufacturers may be tempted to seek a bank loan in order to access global markets. However, this is potentially expensive, and will leave the manufacturer in the constant position of waiting for payments that may only come several months after an international purchase order is received.
Under this business funding scenario, the cash flow gap never goes away. Instead, the repayments on the loan become another drain on working capital while you wait for each invoice to be paid.
This is why specialist export finance can be a better option: it is designed to pay you up front for international purchase orders, for a fixed fee that is settled along with the main sum when the client pays.
How Export Finance Works
OptiPay’s Export Finance is a specialist trade finance solution which provides your business with the upfront cash flow it needs to fund the export of products. Our solution will fund up to 100% of your purchase orders received from overseas buyers, with repayment of the facility up to 90 days later.
Manufacturers who sell to other businesses are ideal candidates for this kind of smart business funding: once you have opened an account with OptiPay and your buyers have been approved, it will be very simple for you to get international purchase orders cashed as soon as you need them. Because the export finance is based on each individual purchase order, you always get enough money to cover your cost, but aren’t committed to borrowing more than you need, for years at a time.
Our export funding will usually fit the timescale between receipt of the order and final payment, so that your customer effectively pays us back for you. A small pre-agreed fee is taken by OptiPay at this stage.
OptiPay’s export finance doesn’t require a credit record, you just need to have proven overseas orders with good clients. Our solutions allow you to retain the capital in your business until the goods are delivered to your customer overseas and paid for. If required, OptiPay will also manage your entire logistics, freight forwarding and forex, with no property security required.
Once established, the line of credit can be drawn, repaid and used repeatedly. You can use it as often or as little as you like, and will only pay when you are exporting!
Obtain a Quote for Export Finance Today
OptiPay is a leading smart finance company and can provide your manufacturing business with a competitive quote. For more information, fill out this form or call us on 1300 694 686.
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Note: OptiPay funding solutions are only suitable for businesses with annual revenues of $1m+ per annum.
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This is Paul, he is one of the directors of UVS, a labour-hire provider to the construction industry. Here’s what he has to say about how OptiPay was able to help his business grow and succeed. Contact an OptiPay expert today to see how we can help you.
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