Financing Options for Import Companies
Whether you are starting an import business or have an established importing business, it can be a very profitable venture if you have the right financing to grow your business. Imports are defined as: a good that crosses into a country, across its border, for commercial purposes; a product, which might be a service that is provided to domestic residents by a foreign producer; or a combination of the two.
Starting or running an import business has never been more profitable because of computers, the internet, and the availability of low cost imports from countries such as China and Mexico. These imports may be resold for up to ten times their cost depending on the competition in your field of operations.
It is essential that you have good, honest suppliers plus creditworthy customers with purchase orders for your imports. If you have the right financing, your business can grow exponentially. But how do you finance growth if your own resources or bank lines of credit are not sufficient to take advantage of big opportunities? A combination of purchase order financing, accounts receivable financing with inventory financing may be the solution.
Definitions:
Purchase Order Financing
Purchase Order financing is the assignment of purchase orders to a third party, a commercial finance company, who then assumes the obligation of billing and collecting. Purchase order financing can be used to finance all current and subsequent orders to improve your company’s cash flow. The process works as follows: 1) Your company obtains a purchase order for products to be sold another company; 2) A letter of credit may be issued, based on a finance companies’ credit, to guarantee payment to suppliers or factories producing the goods; 3) The order is shipped, delivered and accepted by your customer; 4) The customer receives an invoice for the goods; 5) The Purchase Order Company pays the supplier/factory; 6) a commercial finance company or Accounts Receivable Finance Company pays the Purchase Order Financing Company after the products are delivered to your customer; 7) The customer pays the commercial finance company for goods received; 
The accounts are settled and the profit is paid to you.
Accounts Receivable Financing
Accounts Receivable Financing is the selling or pledging of your company’s account receivable, at a discount, to a Factor, a Commercial Finance Company or to an Accounts Receivable Financing Company who may assume a risk of loss. You receive a portion, usually 80% to 90% of the face value of your receivables in advance of payment from your customers in return for a fee, or interest, to be paid to the commercial finance company. When the commercial finance company is paid by the customer, the appropriate fees are deducted and the remainder is rebated to you. “Accounts receivable financing” is also called accounts receivable factoring, factoring financial services, invoice factoring and cash flow factoring. The terms are used to convey the same meaning.
Inventory Financing
Inventory financing is a loan secured by the inventory of your business. Inventory finance enables import companies to hold more stock without cash flow strain and to generate more sales. Inventory finance is often part of a Purchase Order and Accounts Receivable Financing commercial finance package.
These three types of financing can enable an import business to increase purchasing capabilities dramatically; you can accept larger orders and grow your business exponentially. You can use your inventory to leverage your purchasing power. You can use your customer’s credit to obtain these three types of financing; and you can use the commercial finance company’s credit to obtain a letter of credit.
The concept of financing your import company with “other people’s money” is part of a safe and sound business plan. Add strong product quality controls, inventory controls, and good accounting to maximize the success of your import company.
Copyright (C) 2007 Gregg Financial Services
www.greggfinancialservices.com
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Help answer the question
Where to find free start-up finance spreadsheet to show potential investor eg 3yr revenue projection, etc?
I co-founded a start-up. Business plan is in the work. I still need to work on the financial section. I know I should have a CFO work on it. But I don't have $$ to pay/hire a CFO. So I get to wear the finance hat too among other roles. Do you know of free finance spreadsheet templates I could download to use? Need to finish biz plan to show potential investors. Can't show current biz plan as is without figures. Biz plan doesn't mean anything to investors without 3 year financial planning such as revenue projection, dev't cost projection, marketing budget projection, potential # of people for hire, other related finance figures of interest to potential investor. Tks for your help in advance!
finance
Tags: Accounts Receivable Financing, Cash Flow, Commercial Finance, International Letter Of Credit, International Trade Finance, Inventory Line Of Credit, Letter Of Credit, Purchase Order Financing, Working Capital
This entry was posted on Friday, October 16th, 2009 at 5:26 am and is filed under business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
October 16th, 2009 at 5:36 am
I sympathize with you, as you have quite a few decisions ahead of you.
I will say that it's often a good idea to get started at a big firm if you can. You'll make lots of contacts and learn a lot.
Corporate law is very competitive (I've heard the pool is the top 5% of students at top 10 schools), and if you have the entrepreneurial bug, I'm not sure you'd like it. An informational interview or some research might help clear this up.
Build your network/connections as much as possible. If you come from Kansas and have a dream of going to New York, knowing folks who can help you will be critical.
Best of luck to you!
October 16th, 2009 at 5:42 am
It's a scam.
October 16th, 2009 at 5:44 am
Didn’t Hitler say that?
October 16th, 2009 at 5:48 am
we all do fucked up shit
October 16th, 2009 at 9:05 am
One usefull piece of information I learned from my parents growing up:
"If it sounds too good to be true, it probably is."
Let's put it this way, if you did win the lottery, you would not get an email stating so. Here's a good Rule of Thumb: Don't believe ANYTHING you receive or read in an unsolicited email no matter how truthful it sounds. There are more scammers and thieves out there than you want to believe.
October 16th, 2009 at 12:22 pm
Very good article you directed me to. I do have to agree with the author of it, Rockwell. If you really want to find an answer you your lead off question, read the book "The Sociopath Next Door" by Martha Stout. You will understand the mind of those in power. I direct you to this book because Mr. Rockwell has his list of 10 lies. Lie #2 is well suited for the book I have suggested. The book is going to cost about $20.00 or less. Last but not least, if you have a desire to understand how the economy works read "The Creature From Jekyll Island" by G.Edward Griffin.
I leave you with 2 quotes, not of my own.
If the American people really knew how the economy works, there would be a revolution before breakfast. = Henry Ford
Democracy is 2 wolfs and a sheep voting on whats for lunch. Benjamin Franklin
October 16th, 2009 at 7:15 pm
This type of con is coming in thick and fast from Nigeria. It's just a scam, but one that cleans out peoples bank accounts and leaves zero on their credit cards. NO ONE gives money away and asks for all your personal details
October 16th, 2009 at 7:42 pm
Yes, it is a scam.
In one version of this, they tell you to pay taxes up front, you send them the money, and you never hear from them.
In another, they ask for your bank routing number to deposit the funds, but they clean out your account instead.
October 16th, 2009 at 11:19 pm
Search about The Money Masters documantary and if we consider that 9/11 is a internal job you will see the difference !
October 17th, 2009 at 5:38 am
If you don't pay money to enter a lottery, it most certainly is a scam.
Here are the hallmarks of a lottery scam:
You never paid money or bought a ticket to enter.
Your "winning" notification is probably not personalized.
Your "winning" notification came by email, probably from a free email
address such as yahoo.com or msn.com.
The way this scam works is, if you respond to the email, after one or two email exchanges with the so-called "lottery officials" or "claims agent," perhaps accompianied by some official looking but fake documents, you will be asked to pay fees for "taxes" or "handling" or some other reason. This is the scam, you pay the fees and never see any winnings, mainly because there are none to see.
Source(s): http://www.fraudwatchers.org
October 17th, 2009 at 11:06 am
Of course. That is why big pharma alone is paying $150 million in ads pushing it. It is ironic but I can't quite find it humorous that OUR side is being accused of being the dupes of industry. WE read the bills. WE know how bad they are. WE are quite aware that the people who wrote these up were not thinking about how to do something good for the PEOPLE.
I mean, think about it. Obama, congress and special interests put the whole bills together. As soon as they are out and CITIZENS start commenting, we are demonized. It is clear whom they are working for.
October 17th, 2009 at 1:41 pm
Seriously I would love to know who her hairstylist is and whats is up with this guy who wants to look like a woman. He is doing a great job as a poser.
However on a serious note, He doesn’t know what he is talking about.
Islam financing is the answer to Jew Snakes of America.
Americans, wake up and smell the coffee your country is hijacked by the Zionists bankers who have bankrupted your country. Wake up before its too late. This woman is paid and voicing the corp bullshit propaganda.
October 17th, 2009 at 7:18 pm
This is pathetic. If you are going to make PROPAGANDA at least make sure the woman can read the cue cards.
October 17th, 2009 at 8:07 pm
The Vatican’s official newspaper, L’Osservatore Romano, published an article titled “Islamic finance proposals and ideas for the West in crisis,” prepared by economists Loretta Napoleoni and Claudia Segre, that suggested the basic rules of Islamic finance to relieve suffering markets and particularly international financial systems. Islam prohibits usurious loaning of money, the article argued that “sukuk bonds,” securities that comply with Islamic law, may be an alternative to interest.
October 18th, 2009 at 2:35 pm
propaganda at its best
October 19th, 2009 at 5:50 am
This is a SCAM. Check out the below link for confirmation of various email scams hitting the internet including the famous Yahoo/MSN lottery scams and how to report them:
http://www.consumerfraudreporting.org/lotteryscam_Yahoo3.php
http://help.yahoo.com/l/us/yahoo/mail/or...
Unscrupulous thieves have sent you this email and they are trying to part you from your hard earned cash. They will often ask you to call a premium rate number and keep you holding on whilst you rack up a huge phone bill. They are then paid a large proportion of this phone bill. They may ask you to divulge personal information about yourself or ask for your bank or credit card details. Do not divulge any such information under any circumstances. It is surprising how many innocent victims have been duped by these types of emails. Just remember the thieves who send them are very clever and extremely convincing. I suggest you delete the email and send it into cyberspace, hopefully along with the thieving scumbags who send them.
Check out these sites for further information :
http://www.scambusters.com
http://www.hoax-slayer.com/
October 19th, 2009 at 9:44 am
hannahr77, interest is not only forbidden in islam but all other religions of the world. We should establish interest free economies all over the world. Islamic banking is just an eye wash as it is not interest free. Just calling it interest free doesn’t make it interest free. What we need is to finish fiat money and instead base our currencies on gold and silver. And make moneylending non-profitable and without interest. A government institution can do it.
October 19th, 2009 at 4:18 pm
These scum used to roam the desert killing innocent people, then moved to the cities and other countries. History reveals that to rid itself of the Bubonic Plague, Europe killed the rats. There is a lesson there.