Types of Import Financing
What is Import Finance?
Import finance refers to the financial services and products that facilitate international trade transactions involving the importation of goods and services. When businesses import goods from other countries, they often require financial assistance to manage the cash flow gap between paying their suppliers and receiving payment from their customers.
What financing help is available?
Import finance typically involves a range of financial instruments and mechanisms that help importers finance their purchases, mitigate risks, and optimize cash flow. Here are some common forms of import finance available at Finport:
Non-Bank Letter of Credit (LC)
A letter of credit is a guarantee issued by a bank or non-bank LC specialist on behalf of the importer to the exporter. It assures the exporter that they will be paid once the specified conditions are met, such as presenting the necessary shipping documents. Letters of credit help reduce risk for both parties involved in the transaction.
Finport Import Finance
Importers frequently rely on short-term loans to finance their import activities. Finport specializes in providing trade finance loans that are specifically designed to meet the needs of importers. These loans serve as a financial bridge, covering the gap between the purchase of goods and the receipt of payment from customers. The typical funding period for these loans is 120 days, and the loan facility often allows for multiple uses throughout its availability.
Supply Chain Financing
The Finport supply chain financing program provides working capital to importers by leveraging the creditworthiness of the buyer and facilitating early payment to suppliers. This arrangement benefits both parties, as suppliers receive payment earlier, and importers can extend their payment terms.
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