In addition to export finance, MarketInvoice also offers trade finance covering imports. Specialist factoring or invoice discounting with an international division provides an overall funding solution for the import of goods and for the sales process. The main high street banks will have international divisions, more information can be found here.
What is Import Finance?
- The delays and complications associated with trading overseas can be a great burden on an importer’s cash flow. Import finance specialises in overcoming these challenges, leaving working capital free to invest into growing the business.
- 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 cashflow 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.
How does Import Finance work?
- While a seller (the exporter) can require the purchaser (an importer) to prepay for goods shipped, the purchaser (importer) may wish to reduce risk by requiring the seller to document the goods that have been shipped.
- Banks may assist by providing various forms of support. For example, the importer’s bank may provide a letter of credit to the exporter (or the exporter’s bank) providing for payment upon presentation of certain documents, such as a bill of lading.
- The exporter’s bank may make a loan (by advancing funds) to the exporter on the basis of the export contract or purchase order.
Import finance offerings
- Independent trade finance companies provide funding for the import of goods on a stand alone basis.
- An independent will provide a far greater degree of flexibility, support and funding unlike banks that have very rigid criteria and will only provide finance for the very strongest of businesses.
Specialist trade finance companies
- A specialist trade finance company will look at the trading history of the business, the type of goods being imported and their experience in that particular sector.
- They are more concerned with the transaction in hand rather than the profitability of the overall business.
How MarketInvoice can make import finance work for you
The MarketInvoice platform is particularly well suited to providing funds for our clients to purchase goods against confirmed orders from their customers. We can also provide sales finance once the goods have been delivered. Import finance can be used as much or as little as your company needs, making it an ideal solution for seasonal and non seasonal businesses. By using MarketInvoice for your import finance solution you will be able to:
- Pay your suppliers upfront to guarantee supply of goods
- Trade even with suppliers who give you no credit facilities
- Take advantage of bulk buying discounts
- Grow your business
Key import finance terms
Letters of Credit essentially guarantee the exporter of a product bought abroad that they will be paid and the importer that they will receive the goods. A Letter of Credit provides security to both importer and exporter.
This is a document issued by a carrier to a shipper, acknowledging that specified goods have been received as cargo for transportation to a named place for delivery to the consignee who is usually identified. A bill of lading can be issued as a traded object. It is evidence of the contract of carriage of goods.
Free on board
FOB is used in regards to the shipping of goods. Depending on specific usage, it may stand for Free On Board or Freight On Board. FOB specifies which party (buyer or seller) pays for which shipment and loading costs, and/or where responsibility for the goods is transferred. The last option is important for determining liability for goods lost or damaged in transit from the seller to the buyer.
A purchase order is a commercial document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services the seller will provide to the buyer. Sending a purchase order to a supplier constitutes a legal offer to buy products or services. Acceptance of a purchase order by a seller usually forms a one-off contract between the buyer and seller.