The import and export business is still one of the Lucrative trading types that you can enter. However, importing is still a risky business to enter.
If you are still interested in entering the foreign trade industry, one of the first things you have to do is secure the best export and import financing solutions available. With this solution, you will have access to the working capital needed for your business and increased cash flow because you can get a guarantee that all related problems are effectively resolved with suppliers and payments immediately received from the buyer.
There are various import financing options to be chosen today. Business can use it yourself or three or three more in relation. Below are the three most popular options that you can choose:
1. Financing accounts receivable. This option is related to sales or promises of your company’s account receivables, with discounts, to banks, financial institutions, or accounts receivable companies that can risk losses. Under this solution, you receive a portion (usually 80% to 90% of your receivable nominal value) before payment from your customers in return for costs, or interest, which will be paid to commercial finance companies. When customers pay a commercial finance company, the right cost is deducted and the rest is returned to you.
2. Financing purchase orders. This import financing option refers to the assignment of purchase orders to third parties, banks, financial institutions, or commercial financing companies, which then take all the responsibilities of billing and collection from customers. Financing Purchase orders can be used to finance all orders today and succeed to maintain and increase your company’s cash flow.
3. Inventory financing. Inventory financing is related to loans guaranteed by your business inventory. This financial solution allows import companies to accommodate more stocks without a cash flow strain and to produce more sales. Most of the time, financing inventory is part of the purchase package and exclisal financing receivables.
Three types of import financing solutions stated above can enable your business to improve their purchasing capabilities dramatically. With these options, you can receive larger orders and grow your business exponentially.