Importer finance for the stock that's still on the water

The importer's cash cycle

An import order can tie up cash for months. A deposit goes to the overseas supplier when the order is placed. The balance is due before the goods ship or before the bill of lading is released. Then there is sea freight, insurance, port charges, customs clearance, duty and GST on import, local cartage and warehousing. Only once the stock is in your warehouse can it be sold, and your trade customers then pay on their own 30 or 60-day terms.

Put all of that together and a wholesaler might fund a container for three or four months before seeing a cent. That's manageable when everything runs to plan. It isn't when a supplier wants a bigger deposit, a shipment is delayed at port, freight rates jump, a big retail customer pays late, or a chance to buy a whole production run at a discount comes up.

Wholesale and import pressure points

• Supplier deposits and balance payments before shipment
• Freight, port, clearance and duty costs on arrival
• Delays at port or in transit that push out sale dates
• Seasonal stock that has to land before peak demand
• Long payment terms from retail and trade customers
• ATO debt, including GST deferral catch-ups

What an import loan typically covers

Import and wholesale scenarios

1. A homewares importer needs to pay the balance on three containers for Christmas stock before they ship. The exit is the sale of that stock through retail customers.
2. A building products wholesaler has a container held at port with duty and charges to pay. The exit is sales to trade accounts already on order.
3. A food and beverage importer is offered a full production run at a lower price if it pays now. The exit is the sale of that stock over the following months.
4. An apparel wholesaler has a major customer paying 60 days late and supplier deposits due. The exit is collection of the overdue invoice.
5. An industrial parts distributor has an ATO debt after deferring GST. The exit is a refinance once the arrears are cleared.
6. A wholesaler buying a competitor's stock and customer list needs funds on a fixed date. The exit is a bank refinance.

These are illustrative examples, not claimed outcomes.

Why trade finance and banks can be too slow

Trade finance and import facilities exist, but they usually need years of financials, credit checks, set-up time and limits that may not stretch to a big opportunistic buy. Trade credit providers check credit history and want trading records. A bank refinance commonly takes up to three months or more, and you may not be approved for the amount you need.

Cash flow lenders lend off bank statements, which for an importer show huge outflows months before inflows. That pattern tends to reduce the amount offered right when the business needs more.

How Equity Tap funds importers

We lend $50k to $5m for one to twelve months secured by a first mortgage, second mortgage or caveat over residential or commercial property anywhere in Australia, including your warehouse, home or investment property. We don't lend against the stock itself.

We don't need tax returns, BAS, profit and loss or bank statements, and we don't order a valuation before approval. We need ID, property and mortgage details, the purpose and evidence of the exit, such as purchase orders, supplier invoices or customer orders.

Interest for up to the first six months can be prepaid or added to the loan, so there are no scheduled payments while the stock is in transit and on the shelves. Interest is not waived, and the full cost is shown before you proceed. The term matches your cycle: if the container sells in four months, take four months.

We're business owners lending to business owners. There's no credit committee, so the person you speak to is often the person making the decision. Conditional approval can often be given on the phone, with a term sheet in about 30 minutes once we have the scenario, and eligible loans can settle in as little as 24 hours. That's often fast enough to meet a supplier's payment date.

Typical exits

• Sale of the imported stock
• Collection of customer receivables
• Trade finance or bank facility once established
• Refinance or sale of property

Broker note

Importers usually come to brokers with a supplier deadline. Send the scenario through the broker page with the security, the landed cost and the exit. We'll give a fast indicative answer so the client doesn't lose the shipment or the deal.

Also see retail businesses, manufacturing and working capital loans. Apply online or call 1300 123 024.

Business-purpose lending only. Approval, timing and terms depend on the scenario.

Frequently asked questions

Brokers: send the scenario through the Equity Tap broker channel and you will deal with the same lending team.