Import finance is a form of business funding designed specifically to allow companies to take advantage of cost savings available by using overseas suppliers.
Unlike most forms of business finance, however, import finance doesn’t just provide money: it is designed to smooth the importing experience and to eliminate the risks and cash flow problems associated with buying from abroad.
Here are five major advantages of import financing that other funding arrangements can’t match:
It De-risks Importing
There are a number of additional risks associated with buying your supplies from abroad that every would-be importer should be aware of: currency fluctuations, non-delivery, and quality control can all be issues when you’re working in an unfamiliar jurisdiction and don’t have anyone on the ground to check goods before they are paid for and shipped.
Smart import finance such as that offered by OptiPay effectively neutralises all those risks. We take on the currency risk, and will arrange for trusted partners to check that your shipment is ready and up to Australian standards before we pay the supplier and see it shipped.
For businesses that are new to importing, this is a huge relief and removes a major obstacle to accessing the cost savings foreign suppliers can offer. For more established importers, there is a significant saving in terms of time and money of not having to arrange such checks and hedges themselves.
It Deals with the Logistics
Even if you don’t find working with foreign firms daunting, the additional checks, bureaucracy and logistics are an unwelcome distraction for a business’ management.
But with smart import finance, we can do all that for you. Not only will we arrange shipment of your supplies, but we’ll cover the cost of that too. Other forms of trade finance, such as letters of credit, don’t do this: they only offer enough funding to pay the actual supplier.
That leaves businesses having to spend time not only managing the transport and import process, but also finding the money to pay for these additional costs up-front.
Available and Tailored
Unlike other forms of finance, you don’t need a credit record to access import finance, and it doesn’t matter if you have outstanding debts such as a bank loan. Nor do you need to post assets as security.
Import finance works on the basis that you have viable orders to fulfil, and can pay for your goods as soon as you’ve re-sold them or used them to make your product. By its very design, it is always tailored to a businesses’ unique current situation, providing the exact amount needed to get a set of supplies to you in Australia.
That means you’re never paying for finance you don’t need, nor are you limited by a notional amount of money a lender has decided that you need.
Improves your Cash Flow
Even when buying domestically, many businesses struggle with the cash flow implications of paying suppliers – along with all their other bills – ahead of receiving payment for their products. For B2B operators, the eventual payment often only arrives 30, 60 or even 90 days after issuing the invoice for goods or services supplied.
If you’re buying supplies from abroad, that cash flow gap gets considerably bigger – up to 180 days in some circumstances.
Import finance is designed to smooth out that cash flow hit, and gives you certainty on when you need to pay for what. If you require even more control, you can pair it with invoice discounting to ensure you always get your own orders paid as soon as they are sent out.
Fair and Flexible
The way OptiPay does it, import finance is a very fair form of finance: It’s based on a simple pre-agreed fee for the entire package: no interest payments, account fees, or any of the many additional costs that can add to the bill with other forms of business finance. There’s also no cost for keeping an account with us, so when you don’t need any orders financing, you pay nothing!
At the same time, import finance with OptiPay is highly flexible. You decide which import orders you want to fund through our platform, as and when your business requires supplies from abroad.
Import finance is a great way to access the cost savings and business opportunities available through international trade. Get in touch with OptiPay today to find out how we could fund your international business ambitions.
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Note: OptiPay funding solutions are only suitable for businesses with annual revenues of $1m+ per annum.
Related Links
- Trade Finance
- Import Finance
- Export Finance
- What is Trade Finance?
- What is Import Finance?
- What is Export Finance?
- What is Supply Chain Finance?
- Trade Finance for Civil Engineering Companies
- Export Finance for Agriculture, Forestry and Fishing Industry
- Import Finance for Equipment Importers
- Export Funding for Manufacturing Companies
- Export Finance for Food Product Manufacturers
- Import Finance for Food Wholesale Companies
- Import Finance for Healthcare Companies
- Import Finance for Wholesalers
- Five Key Benefits of Export Finance
- Trade Finance Terminology Explained
- The Advantages of Using Trade Finance
Here’s why Our Clients choose OptiPay
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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