Category: 
February 7, 2010
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 company’s 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; 
The accounts are settled and the profit is paid to you.
Accounts Receivable Financing
Accounts Receivable Financing is the selling or pledging of your company’s account receivable, at a discount, to a Factor, a Commercial Finance Company or to an Accounts Receivable Financing Company who may assume a risk of loss. You receive a portion, usually 80% to 90% of the face value of your receivables in advance of payment from your customers in return for a fee, or interest, to be paid to the commercial finance company. When the commercial finance company is paid by the customer, the appropriate fees are deducted and the remainder is rebated to you. “Accounts receivable financing” is also called accounts receivable factoring, factoring financial services, invoice factoring and cash flow factoring. The terms are used to convey the same meaning.
Inventory Financing
Inventory financing is a loan secured by the inventory of your business. Inventory finance enables import companies to hold more stock without cash flow strain and to generate more sales. Inventory finance is often part of a Purchase Order and Accounts Receivable Financing commercial finance package.
These three types of financing can enable an import business to increase purchasing capabilities dramatically; you can accept larger orders and grow your business exponentially. You can use your inventory to leverage your purchasing power. You can use your customer’s credit to obtain these three types of financing; and you can use the commercial finance company’s credit to obtain a letter of credit.
The concept of financing your import company with “other people’s money” is part of a safe and sound business plan. Add strong product quality controls, inventory controls, and good accounting to maximize the success of your import company.
Copyright © 2007 Gregg Financial Services
www.greggfinancialservices.com
About Author
Mr. Elberg is a licensed attorney and licensed real estate broker. Gregg Financial Services is a full service brokerage for commercial finance companies and banks that fund B2B businesses. Mr. Elberg arranges funding from $25,000 to $50 million per month at competitive pricing, and works to reduce your financing costs as your company grows. For more information about GFS, please visit our website: www.greggfinancialservices.com or email:gregg@greggfinancialservices.com
Horaayy..there are 15 comment(s) for me so far ;)
at 0:28 it is written you can..but it shoul be:
At a certain point you CAN’T diversify your portfolio’s risk away.
haha..
2:30 “to calculate beta you need this big computer..”
haha
beta= ratio of st. dev on your stock under consideration to st dev of major index (proxy for mkt) times coeff. corr between rates of return on your stock relative to rates of retrun on your market proxy say: S&P 500 , or better NYSE (2000 stocks)
anyway
or just Cov bet stok and mrk, diveded by variance of mkt
simple as that .. no computers no nothing, hahaha
though it’s a cool video
really funny one
thank you
r.
I've been in Finance for so long that I've decided that I wanted to do a different degree that was along the lines of my future goals… Law. I did my BBA in Legal Studies. I was a Finance major at first. I will suggest that you stick with the Finance Major vs the Business Administration. I mean if you think about what exactly is the B.A. offering you when the bottom line of the degree is in Business Administration? To have a specialty gives you a 'know-how' that makes you more adept in taking on positions that offer stellar pay as Finance and Accounting is known for. Each person is different in terms of what they want to do with their future goals. I normally see students minor in Business Administration if their Undergraduate Degree is in a totally different realm. This is only to signal to the employer that you are versatile and have business skills. If you are a business student I suggest Finance if this is what you want. Finance is definitely interesting and keeps you on the toes not just in the sense of performing statistical analysis but also conducting market and financial research including technical analysis which keeps you in the loop of world news as much as national news. You begin to witness the chain in global commerce & media and how it effects one another and inevitably effects the market as well as consumers far and near.
Another point that comes to mind is the institution that is granting the Finance degree. What is their reputation in the Finance Department? Are they first class? Are they top-rated? Usually the "glamourous pay but slave to your job" are firms off of W-Street which hit Ivy league schools to join their Associate or Summer programs. These programs, once selected ..highly selective, gear you up for positions such as equity or fixed-income analysts. Again, the pay is here, the perks are there, but you get no life. If you're looking to have that lifestyle then ensure your alma-matter can deliver. Your grades will obviously have to stand on its own and well .. if you have connections then use them.
If you want something more exciting in Business then go for Marketing. I'm leaning to the Marketing aspect in my MBA program which will play instrumental in my Entertainment Law (Law, Marketing, Finance (Budgeting)).
Good luck with everything.
P.S. I suggest you take a few finance classes (required and as an elective) before you decide.
http://www.exinfm.com/free_spreadsheets.html
its help
Are you working with a Realtor? Ask them to suggest someone.
If not, Find a Mortgage Broker/Banker who can shop the market for you and find an investor who will finance you.
If you cant find anyone, I hope you made the offer contingent on you finding financing, if not, you are out of your earnest money when you back out.
Good Luck!
Set up a basic credit criteria, in which based on your clients credit score or certain qualifying options that you create, you base your credit line. Ok to make this easier, you could for example use a 90% credit line for clients whose credit score (or other certain criteria because companies sometimes don't look for a certain score but more or less other items they deem necessary) is 800 or more and it goes down from there…so as if a new client you have has a 500 score you could issue them only a 10% financing line. Second, after you set your standards, go ahead and work out your governing contracts, what is your interest rate (check with other similar companies in the field)? What is your late fee and when are payments due..how about penalties? Boy, that's enough for now huh!
nice
very simple but effective
Thanks
Auto finance is what I do for a living and this is very strange.
I would have to say since they have made no effort to take the car they must think that it's not worth the time and money to take it back.
This leaves you hanging though, without a lien release you can never have a free and clear title so while you can tag and drive the vehicle you can not sell it.
I would call them if I were you and see if you can work something out.
Good luck.
Traditional financing means your payments are the same every month for the life of the loan, e.g., $500.
In balloon financing, your payments will be lower, except at the end; this will be several times higher. In such an arrangement, your payment may be $350, but your final balloon payment might be $7000.
The latter type of financing is what trips up people, as they're able to make the smaller monthly payments at least until something happens – they lose their job, the economy turns sour, they have huge medical expenses, etc. Then they find themselves unable to make that balloon payment.
When exploring your options, have you crunched your numbers to be able to afford that car? (This is an important step in preparing for a big-ticked purchase.) Next, do you have enough money saved to be able to cover that balloon payment?
You'll need a good solid business plan and have figures and answers to back it up. Plus some money out of your own pocket.
what is wrong with a pen and paper works real great if the electric goes off!!!