Fuel your international trade with ScotPac import finance
What is import finance?
Import finance solutions provide businesses engaged in the importing of goods or services from other countries with access to working capital. It can include various trade finance facilities and products that help importers manage the financial aspects of any international trade transactions.
Import finance can involve anything from pre-shipment financing and letters of credit, to trade loans and import factoring. Businesses of all types and sizes can benefit from tailored import finance to help mitigate risks, ensure timely payment to suppliers, and facilitate the smooth flow of imported goods from an overseas market.
Linked to your Invoice Finance facility, Import Finance provides an end-to-end funding solution covering a cash flow gap of up to 180 days.
What are the different types of import finance?
Letters of Credit
Letters of credit provide a guarantee of payment to the exporter and ensure that funds will be available if the right conditions are met.
Import Loans
Import loans provide working capital for businesses to be able to purchase imported goods.
Supplier's Credit
Suppliers may offer credit terms to importers, allowing them to pay only after a set period of time from receiving the goods.
Documentary Collections
The use of intermediaries to handle the collection/transfer of trade documents.
Import Factoring
Importers can sell their accounts receivable to a factor at a discount.
Import Trade Insurance
Insurance coverage protects importers against various risks associated with international trade.
Warehouse Financing
Financial facilities based on the value of imported goods held in a warehouse as collateral.
Import Lease
Businesses can lease equipment or machinery needed for importing.
Foreign Currency Financing
The access of financing in the currency of the country the goods are being exported from.
Import Consignment Financing
Financing provided against the goods held on consignment from the exporter until they are sold.
How does import finance work?
Import finance works to help businesses that are importing goods overcome the cash flow gaps and therefore reduce the risks involved in procuring goods from an international supplier.
Under normal circumstances, an international transaction goes as follows:
1. Order
The order for goods is received and the importer makes an application to submit to ScotPac.
2. Letter of Credit
A Letter of Credit (LC) is raised and the goods are then produced overseas and shipped.
3. Payment
ScotPac then provides payment to the exporter/supplier and an Import Bill is created.
4. Delivery
Delivery of the goods ordered are delivered to your business, the Import Bill is submitted as an invoice, and it is received by the client (i.e., your) invoice finance facility.
5. Settlement
The import finance facility is settled through the invoice finance arrangement, with the client (i.e., you) only needing to pay according to the terms agreed to in your facility.
The key benefit of import finance is that it can be flexible and tailored to meet the needs of your business.
ScotPac’s import finance Australia-wide
ScotPac’s import finance funding solutions allow businesses to purchase finished goods for resale from both overseas and local suppliers. Linked to an invoice finance facility, our facilities allow for a truly comprehensive solution to covering up cash flow gaps for up to 180 days.
With the ability to facilitate payment in just about any currency, and lock in options for favourable foreign exchange rates, it’s no wonder why more and more businesses of all sizes across Australia are turning to ScotPac for all types of import finance solutions.
100% funding
ScotPac can offer up to 100% of the cost of imported goods to eligible businesses.
Complete protection
Our risk protection offering allows you to protect your business against the risks of foreign exchange loss.
Totally customised
Our tailored solutions are designed to suit your business, your needs and your plans for future growth.
Our Solutions
Business Loans
Fast, flexible and personalised Home Loans and Business Loans for Business Owners
- FAST SET UP – CONDITIONAL APPROVAL IN AS LITTLE AS 48 HOURS
- FLEXIBILITY ON DOCUMENTATION REQUIREMENTS
- USE YOUR RESIDENTIAL SECURITY FOR FUTURE BUSINESS BORROWING
Invoice Finance
Our Invoice Finance solution allows you to access the cash in your unpaid invoices
- LINE OF CREDIT WITH NO NEED FOR PROPERTY SECURITY
- UNLOCK THE VALUE IN YOUR INVOICES
- FACILITIES FROM $10K TO $150M
Asset Finance
Asset Finance helps by financing new and pre-owned equipment.
- FUNDING AVAILABLE IN AS LITTLE AS 24 HOURS
- FUND NEW AND PRE-OWNED ASSETS
- FUNDING FOR IMPORTED EQUIPMENT
Trade Finance
Trade Finance provides a cash flow injection to help manage the import or export of goods
- PAY OVERSEAS AND DOMESTIC SUPPLIERS
- INCREASE STOCK LEVELS AND EXTEND PAYMENT TERMS
- SELL TO OVERSEAS CUSTOMERS
We help a range of different industries reach their full potential
Frequently Asked Questions
Who can access an import finance facility?
Import finance can be used and beneficial to many businesses that engage in importing finished goods from other markets. If your business imports other materials, such as raw materials or export goods, we recommend speaking to the ScotPac team about either trade finance or export finance.
What goods can be imported?
Import finance is designed specifically for businesses importing finished goods. However, if you’re importing raw materials or other components, there are plenty of other trade finance solutions that can be tailored to meet your business’s needs.
How can import finance help you?
There are different types of import finance depending on your business’s needs. In general, a finance facility can help your business maintain access to working capital and mitigate the inherent risks in importing/exporting. Especially when it comes to the complex paperwork and regulations required to import goods into Australia.
Import finance facilities can help you fund the purchase of finished goods from international suppliers and manufacturers without suffering from cash flow gaps while you await payment from your customers. The funding facility can cover up to 180 days which allows you to access liquid working capital to grow and sustain your business.
How does import finance improve cash flow?
Businesses typically experience cash flow issues when there is a delay in investment expenditure, such as purchasing new goods, and the incoming cash flow from selling those goods, or when an opportunity for growth needs to be capitalised on.
There is usually a delay between the time when an order for finished goods is placed and the time when goods are delivered. This can cause a gap in the working capital available for a business. Additionally, when there are outstanding invoices from customers who have bought the goods, there can be a disruption to the cash flow.
Import finance works to free up the locked up capital that occurs during the buying and selling process. A credit facility can be used to pay suppliers and provide advance invoice finance (up to 95% of the value of unpaid invoices) to businesses. These funding facilities allow businesses to access the working capital they need to purchase more goods, continue operating and ensure they’re able to continue selling more to their customers.
How does import finance mitigate risk in importing?
Import finance facilities assist businesses in reducing the risk involved in conducting international business. The support provided in establishing new trading relationships allows businesses in both countries to conduct more businesses without risking financial loss.
There are a few different global trade finance mechanisms that can be utilised to ensure the conditions of a trade agreement are met before any money is transferred.
Telegraphic Transfer
Telegraphic transfers (TT) enable businesses to quickly transfer funds to international suppliers and other businesses. TT can be used to make advanced payments as required by the terms of suppliers. They are also often used in conjunction with a letter of credit that ensures agreed and certain conditions are met before any funds are released and payment made.
Letters of Credit
A letter of credit is a commonly used international trade finance mechanism. It ensures that both the supplier (exporter) and buyer (importer) fulfill their obligations and meet the required conditions of the trade. The letter of credit details the required conditions and offers a legal guarantee that the goods received will be paid for.
Documents Against Payment
Documents against payment help to reduce risk for the supplier and the buyer. They achieve this by ensuring the right documents are submitted to a third-party before payment is released from the buyer to the supplier. The financial process is similar to an escrow account where the supplier can only access the funds after submitting proof of shipping to the agreed-to third-party.
Is import finance available for importing goods from all countries?
Import finance can be used to pay for goods imported from just about any country, including elsewhere in Australia. With a local office in Guangzhou, China, ScotPac can offer assistance to importers both in Australia and abroad. Our specialists assist clients in negotiating better terms, conditions and arrangements with manufacturers in China and beyond.
What is the maximum term allowed with an import finance facility?
Import finance solutions from ScotPac are tailored to meet the specific needs of your business. We offer short-term solutions to cover cash flow gaps and quick access to working capital, but we can also structure a facility to provide longer term, total funding that encompass periods exceeding 180 days. Make sure to speak to one of our specialists today for tailored advice.
Is security needed for import finance with ScotPac?
We’re proud of our innovative and wide-ranging financial solutions making it easier for our clients to access the funds they need when they need it. Our import finance facility is offered in conjunction with our invoice finance arrangements. This means that in most cases there is no need for additional asset-based security.
Do you have to include invoice finance in your import finance arrangement?
No, you do not! ScotPac offers a range of trade finance options to suit all types and needs of businesses. If you’d like to find out more about which financial solution could be right for you, speak to one of our friendly financial advisors today.
How much does ScotPac’s import finance cost?
Import finance with our team here at ScotPac is very competitively priced. Interest is only charged once the funds are remitted to the overseas supplier until the amount is repaid.
Import finance fees are charged based on the payment amount released to the supplier (exporter) and the fee levels vary depending on the type of business you’re operating and your requirements. For confirmation of applicable fees and available rates, make sure to speak to one of our specialists today.