Guidelines on How Manufacturing and Import Companies Can Access Financing
Manufacturing has a significant part to play in the progress and advancement of a nation. Getting raw materials and making finished products for the regional and export 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 companies use a lot of capital to meet the demand for these services and products. Read more to discover how your import and manufacturing business can access funding.
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.
Also, financing can also be accessed through your company’s assets. This involves selling your credit accounts to a commercial finance company. The finance company will buy the credit accounts at a percentage discount of the actual value of the credit accounts. The commercial finance company will pay you an advance amount for the accounts for a charge that you would typically have to wait until the accounts are paid.
Purchasing order financing will also help you finance your import company. Purchasing order financing is almost similar to asset-based financing. This option involves presenting your invoices and purchase orders and selling them to the commercial finance company. The finance company will take on the liability and the responsibility of charging and receiving the payments. The finance company will supply the products, collect the payment and give you the profit as well as collects its share. The purchase order financing is not cheap compared to a bank loan. It is applicable when banks are not giving out loans, and your profit is high. Purchasing order financing require you to have creditworthy customers and an excellent supply chain.
Accessing a bank loan is also an option for the manufacturing and import companies. The financing that you can acquire will be based on different factors. The bank will consider your creditworthiness and decide on the amount that can be loaned to you. 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.
The financing options that are available will help you keep up with the running of your business and maintaining production and supply.