TRADE FINANCING SOLUTIONS
When running a business, you must be strategic when choosing who your business partners are and who you’ll trust as your suppliers. Sometimes, the most cost-effective option is from suppliers abroad. Capstone’s Trade Financing and Import Financing program provides businesses with access to flexible financing and logistics solutions through Capstone’s network of buyers, wholesalers, and distributors. This allows for a seamless transaction between the business and the overseas supplier that does not interrupt cash flow. It also grants security and peace of mind to both the business, who may be uneasy with the risk associated with purchasing abroad, and the supplier, who may be wary about shipping large amounts of goods without payment.
That’s Where Capstone’s Import Finance Solutions Comes In.
- Easy
- Immediate
- Flexible
How It Works
Trade finance assists with trade cycle funding gaps and allows businesses to obtain goods from a supplier with cash upfront. When a supplier abroad is exporting goods to a business partner elsewhere, they will want assurance that payment will be received in a timely fashion. Instead of the business owner paying for goods right away, the institution handling their import financing will instead produce a letter of credit that will be presented to the supplier or their finance company. The letter of credit serves as a guarantee of payment when the conditions of the initial supplier agreement are met. Upon receipt of goods, payment is made to the supplier or their finance company.
This arrangement can be used for a one-time purchase of supplies or on a continuing basis if there will be a lasting business relationship between the importer and the exporter.
Some benefits of trade and import financing include:
- Improved cash flow management and production of more working capital
- The ability to maintain necessary product levels and fulfill larger orders that would usually not be possible to maintain otherwise
- Achieve higher profit margins with the ability to transact with more cost-effective suppliers and through economies of scale
- Improved relationship between the buyer and supplier
- Remain more competitive in the market
- Diversification and expansion of supplier and logistics network
Why International Trade Financing?
Sometimes, the best deal on supplies simply cannot be found domestically. Capstone has been engaged in international merchandise purchases and sales since its inception. Capstone’s operations involve the import of products from Asia, India, Europe, and South America. We can offer a less expensive alternative to “in-house” export operations. Don’t be deterred from looking for suppliers abroad because of inexperience working with foreign suppliers. Capstone can help you leverage our expertise to your advantage.
Capstone not only has the resources to provide trade and import financing but also to arrange the logistics of the delivery of products. Capstone is able to assist with setting up the required import services including:
- Air and sea shipping
- Inland freight arrangements
- Preparation of shipping documents
- Export licenses
- Establishment of letters of credit
This alleviates a great burden on the business owner, especially if they are not very familiar with foreign trade. Capstone will save you time and money, freeing up your resources to continue to work on ongoing projects and take on more work.
Wrist Watch Company: Trade Financing & Factoring Case Study
Letters of Credit
The combination of purchase order financing and letters of credit can provide the critical capital required to get your customer’s orders fulfilled. A letter of credit is a document produced by a financial institution delivered to another financial institution that guarantees payment of a certain amount. It is most often used between banks that are in different countries, for the purpose of international trade. If as a business owner you pursue import financing with a supplier from a foreign country, they can more confidently accept your proposal to work with them even if you don’t have the money to pay them upfront. The letter of credit will serve as a guarantee of payment from your bank to theirs, as long as they hold up their end of the previously agreed-upon transaction. This removes the risk that your supplier doesn’t perform or deliver the goods to the standard your end-customer requires.
Our representatives have the experience necessary for dealing with foreign markets to be able to work with you to find a solution that will meet your financing needs. Capstone recognizes that every business operates under different circumstances and can tailor a program that works best for you.
Bring your business to the next level by strategically working within our global economy. For more information on Capstone and to receive a quote, please call us at (212) 755-3636 to speak with a representative today.
