As of now, more and more business owners are importing products and services from foreign company since they offer low prices. However, starting such business can be quite stressful most especially if you do not have sufficient finances. Luckily, there are now ways on how to fund import businesses easily. Below are some of the following.
Asset-based loan is a method wherein business owners will sell their account or accounts receivable to financial institutions. However, accounts receivables are sold at a discount depending on the face value of your credit accounts. To help you start your business, the financial institution will give business owners advance payments.
Making use of inventory can also help you fund your import business. This is an effective way of financing such business. This is possible since you use your current inventory to secure a loan which will allow you to purchase imported goods. As of now, there are three types of inventory financing. These include a blanket inventory lien, floor planning, or field warehousing.
Purchase order financing
Purchase order financing is quite similar to accounts receivables since you take your invoices or purchase orders and sell them to a financial institution. This institution will check the risk and the task of billing and collecting. Unfortunately, purchase order financing is not cheap such as a bank loan since you need to have a high profit margin.
Trivia Info Source From: www.business.hsbc.ae