Import Finance funds your new stock before it sells
Importing ties up cash at the worst possible moment. A deposit is often due before production starts, and the balance before or on shipment. Then the goods spend weeks in transit and clearance, and still have to be sold before any money comes back.
By the time your customers settle on 30, 60 or 90 day terms, your working capital has been committed for months.
The Solution: Import Finance
Place your order
Confirm the purchase order with your supplier and submit it to ScotPac.Your supplier is paid
Funding of up to 100% of the cost of goods, for up to 150 days.Repay as the stock sells
Repayment is structured around your trade cycle, not a fixed monthly schedule.ScotPac Import Finance
Without a facility built for importing, most businesses cover the gap one of 2 ways: they fund supplier payments from their own cash reserves, or they borrow against something else, often an overdraft or term loan, and carry a fixed limit or fixed repayments regardless of where their stock is. Both work until the orders get bigger. Import Finance is structured around the transaction itself, so the funding moves with your order volumes rather than against a fixed schedule.
How is my supplier paid?
ScotPac can pay your supplier directly, in the agreed currency.
You pay from your own funds, or draw down against a general facility.
How much of the order is covered?
Up to 100% of the cost of goods, for up to 150 days.
Limited by your available cash or your approved overdraft limit.
What happens as order volumes grow?
Funding can be structured around your import orders and sales ledger as they grow.
Reserves get stretched, or the limit stays fixed until you apply again.
How are repayments handled?
Structured around your trade cycle and customer receipts.
Fixed repayments or ongoing interest, regardless of whether the stock has sold.
What secures it?
Structured around the import transaction, the goods and the resulting receivables.
Often assessed against property, fixed assets, financials and credit history.
Import Finance in action
The situation
A homewares importer had been supplying independent retailers and online stores. Their suppliers in China wanted deposits before production and the balance on shipment, while their own retail customers paid on 60-day terms.
Heading into the pre-Christmas buying season, the business had its largest ever order on the table. Funding it from cash reserves would have left nothing for wages, freight and the everyday running of the business while the containers were still at sea.
The solution
ScotPac structured a $900,000 Import Finance facility alongside the business’s existing Invoice Finance facility, paying suppliers directly in their own currency.
As stock landed, sold and was invoiced, Invoice Finance released cash from those receivables rather than the business waiting out 60-day terms.
As a result, the importer placed its full seasonal order, negotiated a better unit price by paying the supplier upfront, and went into peak season with stock on the shelf and working capital still available for day-to-day trading.
Award winning Business Finance
Established in 1988, ScotPac is Australia’s largest specialist provider of working capital solutions. We combine the experience of a major finance provider with the speed and flexibility of a specialist lender, backed by a team that understands international trade.
Frequently Asked Questions
What is an import loan and how does it work?
Import Finance works differently from a standard Business Loan. It is a form of Trade Finance that funds the payment to your overseas or domestic supplier before the stock has shipped, let alone sold. Rather than a lump sum repaid on a fixed schedule, the facility is structured around your specific transaction and repaid as your trade cycle completes.
What do I need to qualify for Import Finance?
Import Finance generally suits established Australian businesses that buy stock or materials from suppliers and sell on to business customers. ScotPac will typically look for:
- An established trading history, generally at least 12 months in operation
- Business customers rather than consumers, on standard trade credit terms
- Identifiable suppliers and a repeatable purchase cycle
- An Invoice Finance facility, which Import Finance typically works alongside
Security is structured around the import transaction, the goods and the resulting receivables, with exact requirements confirmed during assessment.
How much can I access with Import Finance?
Funding of up to 100% of the cost of goods may be available, for up to 150 days, subject to approval and facility terms. Your facility limit will depend on the size and frequency of your import transactions and your outstanding invoice book, and can grow as your order volumes grow.
What currencies can my supplier be paid in?
ScotPac can support supplier payments in AUD, USD and other currencies. If your supplier requires a specific currency, raise it early with your specialist.
Do I need property as security?
Import Finance is structured around the transaction itself, including your purchase order, the goods and the invoices you raise to customers, rather than being assessed in the same way as a traditional property-backed loan.
What is the difference between Import Finance and a business overdraft?
An overdraft gives you a general revolving limit that does not move with your trading. Import Finance is transaction specific, funding a defined purchase and repaying as that stock sells, so available funding can increase as your order volumes and sales ledger grow.
Can I use it for domestic suppliers as well?
Yes. Although it is most often used for overseas suppliers, the same cash flow gap applies when buying from Australian suppliers on tight payment terms, and the facility can be used for domestic purchases too.
Does Import Finance cover both the supplier payment and the sale cycle?
Used together with Invoice Finance, yes. Import Finance covers the outgoing supplier payment while goods are being manufactured and delivered. Invoice Finance covers the incoming cash flow once the stock has sold and invoices are raised, so both ends of the import cycle are supported.
How much does Import Finance cost?
Pricing depends on the size and duration of your facility, your suppliers, your customers and your trade cycle. A ScotPac lending specialist can provide a quote tailored to your business.