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. Getting raw materials and making finished products for the regional and export market. The same applies to import companies that supply the demand for certain goods and services to the country for development and growth. 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.
Inventory financing can help you acquire financing for your manufacturing and import business. 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. Using your inventory to obtain financing will let you accumulate more inventory without changing your cash flow pending payment of the debt.
Additionally, loans based on your company’s assets is also an option to finance your import and manufacturing company. This will include a finance company to buy your credit accounts. 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 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 assumes the risk and the task of billing and collecting. The commercial company delivers the goods after they are manufactured and collects the payment, deducts its cut and pays you the profit. This option expensive compared to a bank loan. It is suitable when the banks are not lending money, and your profit margin is high enough for the good that you are importing. Purchasing order financing require you to have creditworthy customers and an excellent supply chain.
Bank loans also offer financing option t import and export 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 financing agreement will spell out the monthly payments that should be made and for how long.
The financing choices that you can access will ensure that your company stays in operation and keep up with production.