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. Supplying finished goods to the domestic 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 require substantial capital and investment to meet these products demands. 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 is an expensive option though very effective. You can access a loan by using your current inventory so that you can import the goods that your customers’ demand. 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. These are sold at a percentage discount of the face value of your 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 is also an option that will let you acquire financing for your company. Purchasing order financing is almost similar to asset-based financing. This alternative involves giving your invoices and purchase orders to a financing company that will buy them. The Company will assume the risk and take the opportunity to get paid and charge the bills. The commercial company delivers the goods after they are manufactured and collects the payment, deducts its cut and pays you the profit. The purchase order financing is not cheap compared to a bank loan. It is a good option when the banks are not loaning out money, and your profits are high enough and can withstand it. This option also need you to have an excellent supply chain and customers that are creditworthy.
Accessing a bank loan is also an option for the manufacturing and import companies. The amount that you can access for your import or manufacturing company will depend on various factors. The bank will look into the amount that you can access and make the decision based on your creditworthiness. 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