IMPORT & TRADE FINANCE

Pay suppliers on time, every time, with a flexible line of credit

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Cash Flow Lending To Suit Your Needs

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Funding for ATO Tax Debts

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Keep The Supply Chain Moving With Import & Trade Finance

With an import and trade financing line of credit, you’ll have access to the cash you need to pay for supplies when needed.

This finance solution helps facilitate domestic and international trade between you and your suppliers for the purchase of material goods. Import and trade finance works effectively for businesses such as manufacturers or importers who regularly purchase material goods.

Create extended credit terms

With trade finance, you have 180 days to repay your credit. If your supplier’s invoice has credit terms of 90 days, you could draw down the amount from your trade finance line of credit to pay the supplier’s invoice on day 90. You then have 180 days to repay the line of credit. Essentially, you’ve created credit terms of 270 days (90 days from your supplier plus 180 for the trade credit). This means you have the opportunity to receive, develop, mark up and onsell the material goods to your own customers, and record a sale before you’ve even paid for the materials.

cover cash flow gap

Cover the cash flow gap

When you pay suppliers out of your own working capital, you’re paying out cash that you won’t be getting back until you’ve sold the product to your customer (and they pay you for it). If you sell to your customers on credit terms, it could be a very long time between paying for material goods and seeing a return on the sale of the end product. Import and Trade Finance helps you close this cash flow gap. The line of credit is used to pay suppliers, so you keep your working capital intact. If you receive payment from your customers within the 180 day trade finance window, you have effectively covered the cash flow gap.
strengthen relationships

Strengthen relationships

Without suppliers, it would be very difficult for most businesses to continue operating successfully. Maintaining a good relationship with suppliers is essential to maintaining smooth business operations and reducing supply risk. When you have the ability to pay cash on delivery to your suppliers, you are automatically in a good position to negotiate. By paying for goods upfront, you may get favourable treatment from your suppliers, and you can even negotiate beneficial terms and early payment discounts. If your supplier has a credit limit, rather than pushing that limit when you need more stock than usual, you can utilise trade finance.

Why Use Import and Trade Finance?

Cost-effective

You are approved up to a maximum credit limit, but you only pay interest on the amount that you’ve drawn down, rather than on the total amount like you would with a term loan. This means you’ve got cash to fall back on if you need it, and you don’t pay any interest until you do.

Saves Working Capital

An import or trade finance facility saves you from using your cash in the production of your product, which means you can do more with less. With working capital free to use in other areas of your business, you are free to invest in business growth opportunities as they arise or improve production output to help revenue perform stronger.

Cash Flow Back-up

The great thing about a trade finance facility is that it costs nothing to sit there in the background. There are no charges if you’re not using it, so it’s a handy backup to have to help meet unexpected demand or special opportunities. You can preserve cash for things like wages and other non-material inputs.

Restructuring working capital for longer terms and increased profitability

Business owners who already have a facility like debtor finance typically will consider if their facility limit is appropriate for their business over the next few years and source the cheapest rates and fees they can.

It’s a great idea to look at these metrics and obtain the best value for money, but a consideration that’s often missed is a review of the finance structure.

Our client came to us with a small trade finance limit of $500,000 with up to 90 day terms and a debtor finance limit of $2M with their existing lender. Looking at their product and cash flow cycle, we identified that a $2M trade finance facility with 180 day terms could be sufficient without the need for any debtor finance facility beyond the initial refinance. With an extra 90 days to repay their trade finance, they no longer needed to bring forward the cash from their accounts receivables with debtor finance.

With no line or service fees and a low interest rate, this dramatically reduced the cost of finance in the business and translated to a forecasted year-on-year savings of $95,000 pa.