Import financing includes financial transactions that are destined to provide funding for the purchase of goods into one country from another one.
Importing and exporting are quite complex transactions. Due to all the logistics involved, there’s usually a long time between the purchase and the delivery of products, which might result in a considerable cash flow problem for small and mid-sized business since they still need to function and cover their expenses while waiting for the products to arrive.
Import financing solves this problem by allowing importers to borrow money or get cash advances while they wait for the products they bought to arrive.
There are several ways to get import financing. On one hand, traditional finance institutions like banks and credit unions offer many options including asset-backed loans, regular loans, business credit cards, and overdrafts. While they might work for some businesses, the reality is that traditional financing is not easy to get and they’re usually linked to long term contracts as well as huge collaterals. Therefore, small importers might want to explore other options, such as invoice factoring.
Import financing through invoice factoring
Invoice factoring (also known as invoice trading and invoice discounting) is an import financing solution. By selling their account receivables, importers can get quick access to cash while they wait for their clients to pay for the goods they received. Importers can then reinvest that cash or simply use it to cover other expenses as well as day-to-day operations.
Invoice factoring works thanks to marketplaces like Velotrade that allow businesses to upload their outstanding invoices into the system making them available for investors to purchase via auctions. When an investor makes an offer and the parties agree terms, the money is usually made available within a few days. The entire process is completed online.
Apply for financing right now!
If you are a registered company that’s been in business for 1 year generating turnover of over 1 million dollars (USD) and your client has a solid credit history and has been in business for at least 3 years generating turnover of over 20 million dollars (USD), then you can sell your invoices using Velotrade today!
We work with businesses from all over the world and support many currencies. Start the process now and get your SME on the right track! If you have any queries, you can contact our team online, or give us a call on +852 5808 3777.