Companies involved in importing goods have various logistical and financial obstacles to overcome. An import finance facility can be an important tool for businesses of all sizes to use to ensure cash flow and access to capital when needed.

Why is import finance important?

Due to the nature of importing, there can often be a significant delay between the purchasing of products and goods and the delivery of those goods. This can cause issues in terms of cash flow which for small and medium-sized businesses can be crippling to ongoing operation and covering expenses prior to delivery.

Providers of import finance Australia wide, such as us here at ScotPac, provide tailored and flexible solutions for advanced capital to companies across a range of industries. 

How does import finance work?

Import finance is a unique type of trade finance facility that solves the problem of delayed delivery of goods for companies involved in importing. By having access to finance to fund the import of goods and products, which often needs to be pre-paid, before delivery actually takes place, businesses are able to grow and operate whilst still covering their ongoing expenses.

In a simple way, import finance can be viewed as the capital that enables the importing to actually take place.

The Importance of Import Finance

This type of financial facility is essential for international businesses. There are risks involved in the logistics of importing and having access to working capital can be a significant problem. Without import finance, the ability of companies in different countries around the world to trade and engage in business would be severely restricted. 

Using import finance offers a number of critical benefits:

  • Optimised cash flow and access to working capital when needed.
  • Mitigated risk in importing .
  • Flexible timelines for repayment.
  • Prompt payment of invoices from suppliers.
  • Establishment of strong, trusting business relationships.
  • More efficient supply chain operations. 

Are there different types of import finance?

Yes, there are actually a number of categories under the trade finance banner.

1. Letter of Credit

A letter of credit issued by a bank or similar financial institution reassures the exporter that payment is guaranteed by a reliable third-party. This can help to mitigate risk, establish trust, and provide peace of mind between parties, especially with first time transactions. 

Letters of credit are similar to bank guarantees and in some contexts can be the same thing. Generally, letters of credit are the term used in international trade arrangements while bank guarantees are more common in the context of real estate, construction, and infrastructure industries.

2. Invoice finance

Invoice finance and receivables finance can also be used in international trade. This allows businesses to essentially sell their accounts receivable (i.e., invoices that have yet to be paid) and receive a specified percentage of the amount in advance of the invoices being settled. 

3. Asset-backed finance

Asset-backed loans are secure financial facilities that use assets as collateral. It allows importers to access working capital through which they can then import products and goods using their current inventory, property, buildings, equipment, or other assets as security.

How do you get import financing?

Traditional financial lenders, such as banks and other institutions, may provide some import finance facilities, but for quicker, more flexible, and highly tailored solutions we recommend choosing a reputable non-bank lender, like ScotPac. By working with our lending specialists, we’ll work to understand what you need for your business and what sort of financial facility would enable your company to not just operate but thrive and grow. 

Our finance solutions are tailored to ensure they effectively fill the gaps in your access to working capital so that you can import and purchase when you need to. Our custom solutions are perfect for businesses of all sizes and with offices around Australia and New Zealand, there’s bound to be a local ScotPac specialist available close to your business.

With our secure working capital solutions, you can rest easy knowing that your purchase requirements are taken care of, and your business best enabled to thrive. 

The ScotPac Offer

Truly cutting-edge tech-enabled experiences

The team here at ScotPac takes great pride in our ability to constantly evolve and transform our service offering to take advantage of the latest technologies. From trade ledgers to partner portals, our use of technology allows us to dramatically increase the speed with which we are able to secure the working capital you need.

To find out more about how we use tech to enhance your experience of setting up an import finance facility, make sure to ask us today. 

Experience with all types of businesses

We consider ourselves as the fuel that helps businesses grow. With extensive experience working with many businesses across both Australia and New Zealand, we know that every company is unique and therefore the facility required needs to be equally tailored to suit their needs. The sheer breadth and depth of our capability is second to none. Whether it’s corporate finance, property finance or import finance, we are best positioned to draw on a range of tools and networks to provide the right custom working capital solution for your business. 

Whether you are a small business looking to grow or a large company looking to smooth out your operations, ScotPac is here to help!

Our strength is in our relationship with clients. The proof in the pudding is our high ratio of account managers to clients. This allows us to not only understand our clients better and more thoroughly, but it enables us to ensure you and your business receive the attention it not only needs but deserves. 

That’s why we’re the largest non-bank lender in Australia. If you want to find out more about how we can effectively ensure that your business grows and how you can access import finance without the stress, contact us today.