Whether you are starting an import business or have an established importing business, it can be a very profitable venture if you have the right financing to grow your business. Imports are defined as: a good that crosses into a country, across its border, for commercial purposes; a product, which might be a service that is provided to domestic residents by a foreign producer; or a combination of the two.

Starting or running an import business has never been more profitable because of computers, the internet, and the availability of low cost imports from countries such as China and Mexico. These imports may be resold for up to ten times their cost depending on the competition in your field of operations.

It is essential that you have good, honest suppliers plus creditworthy customers with purchase orders for your imports. If you have the right financing, your business can grow exponentially. But how do you finance growth if your own resources or bank lines of credit are not sufficient to take advantage of big opportunities? A combination of purchase order financing, accounts receivable financing with inventory financing may be the solution.

Definitions:

Purchase Order Financing

Purchase Order financing is the assignment of purchase orders to a third party, a commercial finance company, who then assumes the obligation of billing and collecting. Purchase order financing can be used to finance all current and subsequent orders to improve your companys cash flow. The process works as follows: 1) Your company obtains a purchase order for  products to be sold another company; 2) A letter of credit may be  issued, based on a finance companies credit, to guarantee payment to suppliers or factories producing the goods; 3) The order is shipped, delivered and accepted by your customer; 4) The customer receives an invoice for the goods; 5) The Purchase Order Company pays the supplier/factory; 6) a commercial finance company or Accounts Receivable Finance Company pays the Purchase Order Financing Company after the products are delivered to your customer; 7) The customer pays the commercial finance company for goods received; 8) The accounts are settled and the profit is paid to you.