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What do you mean by import finance and how is it beneficial for a business?

Oct 28, 2020 - 06:10 AM Author - Alex Pardin


In simple terms, Import Finance implies funding the gap of goods collection and making the payment. In addition, Axios Credit Bank Ltd. can say that it is a kind of short-term financing, and generally the third party issues it. The funds that businesses or individuals use to bring goods and services into their country are Import Finance. There could be some issues while managing the cash flow statements of the company. It is because the frequently involved disruptions and complications imply that the payment has been made long before the delivery of the goods.

Apart from this issue, there are clearly various advantages of importing such as – quality of goods is high, lower prices will get a competitive advantage as well. By doing an overseas business, there are many challenges as well that any businesses have to face. They have to follow the extended payment terms, have to risk the business more than available funds, and have to purchase goods in large volumes. It will totally depend upon the risk taken that it would work as a miracle or a disaster.

Peculiarly, the requirement for import financing occurs due to the challenges any business has to face while doing overseas trading alone. But further complications add up when the importers start exploring other options for financing. Import finance implementation has helped to promote or instead define the trading world. The degree of risk, as well as the extent of moving parameters involved in overseas trade, will always remain. But the use of such import financing tools may help in protecting the businesses.

The challenges faced during importing

One of the major problems that any business has to face is zero trust level on the overseas suppliers who are demanding advance payment even before starting the manufacture or shipping of goods. Due to which it would be difficult to manage the company’s cash flow.
Longer terms of payment can leave companies struggling for working capital. Import financing from Axios bank can help in reducing the burden of business by providing additional money to them to make sure the immediate payment for suppliers. It is an excellent opportunity for businesses to enhance their work with Import Trade Finance Services.

Recommended Read: What Are The Major Challenges In Trade Finance And How To Manage Them?

Benefits that businesses will achieve from import finance

Invoice factoring, bank guarantees, import loans, asset-backed facilities are some of the forms of import financing. They all help the importers in raising capital as they supply overseas suppliers with raw materials and essential products. You can get better Import Trade Solutions with the help of import financing. It would help your business in building a strong bond with overseas suppliers. It will help in putting the company in an excellent position to offer better terms between sellers and buyers in commercial contracts. 

Recommended Read: Why You Need Trade Finance Instruments: An Overview

Import financing can be proved as an appropriate opportunity, especially for those businesses that are already established in import trading. They are already having trusted overseas suppliers, purchasing confirmation orders from the much creditworthy customers. Sellers should purchase only finished goods or sellable raw materials that have a 20% margin for gross profit. The provider handles the documentation that will serve the purpose of a factoring agreement. It will make the process much more efficient and faster, preventing any unnecessary delays. The facilities include the protection of credit in order to reduce the bad-debt risk and prevent inaccurate and late delivery of goods.

How can import finance help businesses?

Here Axios Credit Bank Ltd. provides a detailed view of How Import Finance Works. Import factoring operates from a great customer on a verified order basis. Up to 100 percent of the price of the order is the maximum amount advanced for imports. This form of working capital funding was explicitly designed to support overseas trade by facilitating the business cycle from starting a request to end-customer payment. The finance provider will serve as a medium to fund the entire transaction between the importer, the producer, and the end customer.
It makes it easier for suppliers to take new orders as they will get their payment quickly. And as a direct result, the importer can negotiate early discounts for payment. The importer is in a better financial position with this facility to fulfill the orders and accept the latest ones.
Multiple transactions and a large amount of money often require a certain degree of trust with the peer with whom you want to carry your business. Tools of trade finance services came into the ground in order to make such transactions, for the better flow of the businesses, and to expand its work.


Through import financing, it would become easier for companies to enhance their import trade. It is the better option mainly for those businesses that are well settled before and have trusted overseas suppliers as well. A new business can also try it by taking a risk as it might serve as a miracle if worked properly.