Guidelines on How Manufacturing and Import Companies Can Access Financing
Manufacturing plays a huge role in the growth and development of a country. Supplying finished goods to the domestic 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 require substantial capital and investment to meet these products demands. View more here to find out how these companies can access financing and the financing options available.
For the import and manufacturing business, you can access finance by using your inventory to obtain 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. This will allow you to add to your inventory without affecting the cash flow as long as you can get through this debt.
Also, asset-based loans are also a way to finance your import and manufacturing company. This will require you to get a finance company that will purchase your credit accounts. These are sold at a percentage discount of the face value of your credit accounts. The finance company will give you an advance payment for the accounts for a small fee that you would have to wait until their payment.
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 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 will supply the goods and get payment, and also gets its cut and sends you the profit. This is an expensive option 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. This option also need you to have an excellent supply chain and customers that are creditworthy.
Bank loans are also an option for the import and manufacturing 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 financing agreement will spell out the monthly payments that should be made and for how long.
The financing options that are available will help you keep up with the running of your business and maintaining production and supply.