Import Finance

Should your business be involved in buying goods from either overseas or UK based suppliers then at some stage those goods will need to be paid for. It may be that your business has managed to negotiate favourable credit terms but should your supplier require payment prior to shipment then your business may well benefit from some form of Import or Supplier Finance. There are a number of ways that businesses can pay for imported goods from the issuing of Letter(s) of Credit to taking out a Trade Loan usually by factoring your customer’s sales invoice(s) through an Invoice Factoring facility. In many cases lenders, will concern themselves less with the strength of the balance sheet or profitability of the business and focus more on the transaction i.e. the type of goods being imported and the experience the directors have in the business sector in which they operate.

There can be several benefits in operating an Import Finance Facility including:

• Import finance will help you to close the funding gap between an order from a UK customer placed on credit terms, and the payment demanded by your overseas supplier
• Using an import finance facility will ease the pressure on cash flow and can take care of some of the complex paperwork and procedures that come with it
• Import finance can fund up to 100% of overseas purchases; freight, duty and VAT included, all the way to the point where the UK customer pays your invoice
• Reduces the risks when trading with sometimes unfamiliar markets as facilities can include credit protection to minimise the risk of bad debt and untimely delivery of goods

Export Finance

Export financing is a key competitive factor for exporters to increase their chances of obtaining a new contract. There are several advantages for both importers and exporters in having a specialist funder to manage and finance the transaction. If your business is involved in selling goods overseas, then similar to UK structured Invoice Discounting and Invoice Factoring facilities it may be possible to utilise Export Factoring to maintain vital working capital when trading with companies overseas. As a guide, business cash flow can benefit from receiving up to 80% of the value of unpaid sales invoices in advance, with the balance of the invoice value less a small handling fee being received from the lender when your customer settles the invoice.

Some of the questions that a lender would be interested in learning the answers to would include:

• Whether the purchase order been received from a verifiable client?
• Do you manufacture the goods or act as an agent on behalf of a supplier?
• Who is the supplier and can they be verified? What are the goods being shipped?
• Are they standard/finished goods or part of something larger?

If you are seeking to expand your business into emerging markets and you require tailored solutions to finance your growth, please contact to Advance Leasing at enquiries@advanceleasing.co.uk