If your business has ever considered a foreign supplier but been put off by funding issues, you will know that there is a significant cash flow gap between paying for overseas goods and actually selling the finished product in Australia. Put simply, import finance is a form of business funding designed specifically to plug that gap and eliminate the risks and cash flow problems associated with buying from abroad.

Import finance is a relatively short term form of business finance, with the buyer only putting the facility in place for the period required to cover the transaction. This generally ensures the cost is lower than arranging longer term finance, while significantly improving cash flow management and helping with the logistics of foreign trade.

Why is Import Finance Needed?

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. First, because foreign factories and suppliers are also taking a risk by trading across jurisdictions and to mitigate this they demand strict payment terms: typically, they will want a significant deposit up front and often require the balance to be paid before shipment commences. Shipment itself then takes time (and also has to be paid for), and then the goods have to clear customs on arrival at further expense to the buyer. The cash flow gap can easily grow to 180 days in these circumstances.

Sourcing supplies such as manufactured goods from countries such as China can provide significant cost savings to Australian businesses. Import finance is therefore needed to help overcome the risks and cash flow problems associated with importing, and facilitate the growth and profit margin improvement available to those prepared to trade internationally.

Import Finance for All

So long as you have an annual business turnover of at least $1m, and work with at least four regular paying business customers, you can apply for debtor finance with us. It’s quick and easy, and once your account is approved you could have the funds you need within a single business day.

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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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