Invoice Finance does a lot more for export businesses than just provide access to the working capital tied up in unpaid invoices. It turns overseas sales into immediate cash flow to help cover operational expenses and allow your business to seize new opportunities.
With Invoice Finance, you no longer have to wait the 30, 60 or 90 days it takes for overseas customers to pay your issued invoices. Instead, with a partner like ScotPac, you can access the cash you need when you need it without worrying about the delays in international delivery and trade!
Discover why Invoice Finance may be right for you.
Can You Use Invoice Finance on Export Invoices?
The short answer is yes. Absolutely.
For Australian exporters, winning the sale is just the beginning. Once goods are manufactured and/or shipped, even a satisfied overseas buyer may not pay their outstanding invoice before the expiration of the standard payment term.
However, you still have to pay your suppliers, meet payroll and cover the next production run.
Which is exactly why Invoice Finance for export businesses is critical. It enables you to convert your unpaid invoices into accessible working capital within as little as 24 hours.
What makes an exporter eligible for Invoice Finance?
Export Finance is linked to a domestic Invoice Finance facility, so the core qualifying criteria are the same. Your debtor must be:
- Creditworthy i.e., reliable to pay the bill; and
- A genuine trade partner, with the right trade documentation
When the ScotPac team of lending specialists assess your export Invoice Finance application, we don’t just focus on your credit score as a business. We take a more holistic look at:
- The financial strength and payment history of your overseas buyer
- Whether the goods or services being provided have been delivered or shipped yet
- Your supporting trade documentation (which can include bills of lading, purchase orders, or export declarations)
Once your Invoice Finance facility is approved, you can draw on the cash needed secured against your export invoices. This gives you control over a flexible line of working capital that can scale alongside your sales.
What documentation is needed for Export Invoice Finance?
For custom advice, we recommend getting in touch with our team here at ScotPac. Our lending specialists will help you understand exactly what is required for your specific working capital solution.
However, in general, we may typically request documents such as:
- The commercial invoice
- Proof of shipment (which could be in the form of a bill of lading or airway bill)
- Export contract
- Purchase orders
- Insurance documentation (if applicable)
If you have these documents ready before beginning your application, you will significantly reduce the amount of time it takes to complete and receive approval.
How Does Invoice Finance Work With Overseas Customers?
Export Invoice Finance operates in a similar way to standard Invoice Finance.
- You enter into a trade agreement with an overseas customer or buyer.
- Your business then ships the goods or delivers services as usual.
- You can then raise and issue the invoice for the export trade.
- You then upload the invoice (and any required supporting shipping documents) to the ScotPac portal for financing.
- Your business can access up to 85% of the invoice value in advance, in as little as 24 hours.
- Your overseas customer pays their invoice in line with the agreed terms.
- You receive the remaining balance once your customer settles the invoice.
Export Invoice Finance is different from Export Finance. Find out more about ScotPac’s Export Finance solution.
Why is Export Invoice Finance so important?
Invoice Finance in general helps businesses better manage cash flow to meet ongoing expenses and fund growth.
When it comes to international trade, longer payment terms can make this working capital solution all the more important.
In fact, longer payment terms are one of the biggest cash flow risks in exporting. And it is exactly the type of risk that Invoice Finance is designed to solve.
In a standard international transaction, net payment terms can run from 30 to 120 days. That can mean waiting months for payment, and drawing on overdrafts or personal savings to cover expenses in the meantime.
With Invoice Finance, you can access the cash owed to you shortly after shipment, cutting your cash flow cycle from months to days.
How does Export Invoice Finance differ from regular facilities?
One point of difference for Export Invoice Finance is the added factor of your buyer’s location and the associated country’s risk profile.
Here at ScotPac, our credit team assesses the creditworthiness of each overseas debtor individually. Funding is available for exports to approved destinations, and ScotPac currently supports customers in over 20 approved countries. If the market you trade into is not on that list, speak to a lending specialist before you assume it is out of scope.
If you have concerns about the risk profile of a particular country to provide export trade to, speak to a ScotPac lending specialist today. There may be non-recourse, insurance or alternative currencies to help mitigate the risk of certain overseas markets.
Apply for Export Invoice Finance today
ScotPac is not just Australia and New Zealand’s largest non-banking lender. We support over 9,300 businesses and fund more than $26.3 billion in invoices each year.
We work as genuine partners with our clients to ensure they have access to the right flexible working capital solution to fuel their success.
