Guidelines on How Manufacturing and Import Companies Can Access Financing
The manufacturing sector has an essential role to play in the prosperity and expansion of a country. From raw materials to finished products, these companies ensure a supply of their finished products for the local and international market. This also is the case for the import businesses that fill the need for products and services to the country for development and progress. These businesses need a tremendous amount of money and assets to fulfill the demand for these products and services. View more here to find out how these companies can access financing and the financing options available.
You can get financing for your import and export business through inventory financing. This can be expensive but also a very effective way of securing financing. Using your current inventory to help you access a loan to help you import the good that your customers want. Inventory financing will allow you to acquire more stock without denting your cash flow as you wait to clear the debt.
Additionally, loans based on your company’s assets is also an option to finance your import and manufacturing company. This involves selling your credit accounts to a commercial finance company. The credit accounts are sold to the finance company for a percentage discount off the value of the accounts. The finance company gives you an advance payment for a small fee for the accounts that you would otherwise have to wait for payment.
A purchasing order financing will also allow you access to finance your company. This alternative is also almost the same as asset-based financing. This option involves presenting your invoices and purchase orders and selling them to the commercial finance company. The Company will assume the risk and take the opportunity to get paid and charge the bills. The finance company will supply the products, collect the payment and give you the profit as well as collects its share. This option expensive compared to a bank loan. It is applicable when banks are not giving out loans, and your profit is high. This option also requires you to have a good supply chain and creditworthy customers.
Bank loans also offer financing option t import and export companies. The financing that you can acquire will be based on different factors. The financing bank will evaluate your creditworthiness and determine if the amount that you are applying for can be lent out. The contract you’re your company, and the bank agrees to will result in monthly payment to the bank for a decided amount of interest for a certain period.
Financing options let your company keep operating and the maintaining supply of products and services