There’s a lot of money to be made in the selling of imported goods. If your business is able to bring customers merchandise that they would otherwise have to travel around the world to get, you stand to make yourself invaluable to those clients. In order to manage the time and money needed to deal items that are manufactured in a distant country, your business may need to employ some form of import financing. Whether you’re selling accounts or borrowing against your assets, what’s most important is that you maintain the necessary capital to keep your business from going under.
Use Your Assets
There are always pros and cons when it comes to using collateral to secure a loan. In some cases it’s a total gamble, in others it’s a simple means to an end. For those dealing expensive goods to reliable, credible clients, your inventory can be offered to a lender as a guarantee. Asset-based loans can be especially useful in instances where you’re already paid for a product that has yet to be delivered. Instead of waiting for the buyer to receive and send payment, you borrow capital in the amount you know you’ll be paid and then reimburse when all transactions are final. Your company stands to lose a bit of money in fees, but that’s much better than the alternative of not being able to cover your monthly overhead.
Factor Your Accounts
If sales are being made and inventory is being moved, you can consider selling your accounts receivable or factoring your purchase orders. After commodities have been sold to a customer but before the money arrives, you can sell that account to a financing company. Generally speaking, you’ll keep about 80 or 90 percent of the earnings. Your business trades a portion of a sale in exchange for not having to scramble for funds while waiting for a client to settle up.
Selling purchase orders is a similar way to secure import financing. Your company will sell transactions that still have to be fulfilled and leave the factoring company in charge of billing and collections. The financier will likely charge you more for the added uncertainties, but if your profit margin is big enough, it can be worth it to receive the expedited funds.
The drawbacks of selling imported products can be overcome if you’re able to maintain a steady cash flow while waiting for transactions to complete. Figure out what’s best for your company and choose the form of import financing that can help make it happen.
- Financing Blog (24)
Newsletter Sign Up
3650 James Street Suite 204
Syracuse NY 13206
877-978-4254 (toll free)