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Invoice Factoring for International Import/Export
One of the biggest problems with any import/export business is maintaining the cash on hand to not only keep your business running, but actually getting it to grow. International customers may take some time to pay their invoice, and there can be exchange rate issues and other problems that complicate the process. Moreover, import/export businesses rarely move small values of merchandise, so the amount of capital these businesses have tied up waiting for payment can be substantial. Banks may be hesitant to provide funding and only add another headache to the process, so many international import/export firms have found that invoice factoring is the solution they’ve been looking for.
What is Invoice Factoring for International Import/Export
Invoice factoring is a business service whereby a factoring company purchases your receivable invoices and provides you with cash. The initial funding rate is usually from 80-95%, and you’ll be paid the remainder minus a discount fee once your client pays the invoice. As a result, you can get the capital you need to grow your business when you need it.
Benefits of Invoice Factoring for International Import/Export
There are many benefits that invoice factoring can afford international import/export businesses. The first is that you can get your funding quickly, so you’ll have the cash on hand to grow your business. There’s no restrictions on how you can use the cash, so you can hire staff, pay port fees, secure warehousing, find new products or suppliers, or anything else that your business needs to grow.
Additionally, invoice factoring looks at the creditworthiness of your customers rather than your business. This makes it ideal for businesses that haven’t been open long enough to establish a credit history, or those that have had credit issues in the past. Invoice factoring also isn’t a debt, so it helps keep the bookkeeping process simple while providing your company the cash it needs to grow.
Finally, invoice factoring will let you consolidate a number of administrative and accounting tasks that take time away from focusing on your core business processes. As a result, more of your limited time and energy can be spent growing your business instead of worrying about things like collections.
As you can see, invoice factoring provides many benefits to international import/export businesses. It ensures that they have the cash on hand to grow without suffering from the headaches that bank loans and lines of credit come with. If your import/export business needs liquid capital now, try invoice factoring!