Support and finance for trading overseas

Import finance or Trade finance enables a business to either reduce or eradicate completely its working capital requirement when importing goods from foreign manufacturers and suppliers.

There are two types of Import Finance:

Independent trade finance companies provide funding for the import of goods on a stand alone basis. Unlike banks that have very rigid underwriting criteria and will only provide finance for the very strongest of businesses, an independent will provide a far greater degree of flexibility, support and funding.

A specialist trade finance company will take a view on the trading history of the business, the type of goods being imported and the turn of the stock and their experience in that particular sector.  Profitability, the strength of the balance sheet or time in business is not of crucial importance.   Funders are more concerned with the transaction in hand.

In many instances this type of import finance negates the need for letters of credit as the trade finance company will pay cash for the goods upon delivery to the UK or against shipping documents.

Specialist factoring or invoice discounting with an international division provide a complete funding solution for the import of goods. It is theoretically possible to obtain funding from start to finish.

Providing a business has pre sold the goods, an import finance facility can purchase the goods from the supplier. This can be for up to 100% of the purchase price.  As soon as the goods hit the UK and are delivered to the end user and an invoice is raised, the import facility is repaid by a factoring or invoice discounting facility.

A factoring facility will generate up to 80% of the end sales price repaying the import facility in full.  As soon as the UK customer pays their invoice the remaining 20% is paid to you less and charges due to the finance company.

For further information and advice, please contact us today.