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. Similar, import companies also contribute to this supply and development. These companies use a lot of capital to meet the demand for these services and products. Read more about the options that are available for your manufacturing and import business that is available here.
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. Using your current inventory to help you access a loan to help you import the good that your customers want. Inventory financing will allow you to acquire more stock without denting your cash flow as you wait to clear the debt.
Additionally, loans based on your company’s assets is also an option to finance your import and manufacturing company. This involves selling your credit accounts to a commercial finance company. The credit accounts are sold to the finance company for a percentage discount off the value of the accounts. The finance company gives you an advance payment for a small fee for the accounts that you would otherwise have to wait for payment.
A purchasing order financing will also allow you access to finance your company. This alternative is also almost the same as asset-based financing. This alternative involves giving your invoices and purchase orders to a financing company that will buy them. The finance company will take on the liability and the responsibility of charging and receiving the payments. The commercial company will supply the goods and get payment, and also gets its cut and sends you the profit. This option expensive compared to a bank loan. It is applicable when banks are not giving out loans, and your profit is high. This option also requires you to have a good supply chain and creditworthy customers.
Accessing a bank loan is also an option for the manufacturing and import companies. The amount that you can access for your import or manufacturing company will depend on various factors. The bank will consider your creditworthiness and decide on the amount that can be loaned to you. The agreement that the bank and your company get into will require you to make payments on a monthly basis for a stipulated amount of interest and period.
The financing options that are available will help you keep up with the running of your business and maintaining production and supply.