Introduction
Do you require a new import, but you can’t find the right financing?
Or, are you unsure about your options?
In this guide, you’ll find out everything you need to know about import loans, including what they are and where you can find them.
Let’s dive in!
What’s in this guide?
Top 5 import loan providers
1. Ashwood Partnerships
Type: Alternative finance provider
Loan amount: Bespoke
Loan term: Bespoke
Ashwood Partnerships are specialists when it comes to importing finance, with many of years experience in this area dealing with businesses that may not have been able to secure funds from traditional routes such as the government or banks.
This helps importers structure adequate funds for their business in an area where there is more focus on the export of products.
2. HSBC
Type: Bank
Loan amount: Bespoke
Loan term: Bespoke
HSBC originally acquired the Midlands Bank in 1992, which was one of the most significant banking mergers at the time.
According to data from 2017, HSBC has around 229,000 employees globally and has a revenue of approximately $51.445 billion.
This makes HSBC one of the most successful banks in the world, being a goliath in the market with 38 million customers.
Company rating on Trustpilot: 1/5
3. NatWest
Type: Bank
Loan amount: Bespoke
Loan term: Bespoke
NatWest is one of the most well-known banks in the UK and has roots that go back centuries from the merging of two different banks called 1968 National Provincial Bank (est.1833) and Westminster Bank (est.1836), which ended up as National Westminster Bank.
NatWest can offer businesses that require assistance with their imports different methods, such as import documentary collections, import letters of credit and guarantees or bonds.
Company rating on Trustpilot: 1/5
4. Lombard
Type: Alternative finance provider
Loan amount: Bespoke
Loan term: Bespoke
Lombard is a company that has been around for over 150 years, initially in the business of leasing wagons to the coal industry for a healthy profit.
Now, Lombard offers a wide range of finance options including capital import finance, asset financing or specialist finance that depends on your company’s industry.
Company rating on Trustpilot: 2/5
5. Danske Bank
Type: Bank
Loan amount: Bespoke
Loan term: Bespoke
Danske Bank, as the name suggests, is a subsidiary of Danske Bank Group which originates from Denmark.
They can offer their customers a bridging loan, which doesn’t have a minimum or maximum amount and can be used for things such as constructing premises, renovations or letting you close a deal without having to wait for another transaction.
Repayment is usually made in a lump sum at the end of your term.
Company rating on Trustpilot: 4/5
This list of the top ten business loan providers mainly takes into consideration the companies customer reputation, how much your business can borrow and the interest your lender will charge you.
FAQ
What is a business loan?
Typically business loans are where you ask a lender, such as alternative finance or bank, to lend you a specific amount of money for a certain length of time.
You agree to pay back this money on a monthly basis with a set amount, that usually includes any interest you might need to pay on top of your loan.
Having a fixed loan, for instance, might help you to budget your companies finance, as you’ll know what you need to be paying.
What is an import loan?
There are few different options when it comes to the financing of your imports, whether it’s to fulfil an order, maintain cash flow between orders or while you are waiting for payments.
Traditionally, import loans might be structured as a short-term loan to ensure that you can make any emergency payments on time such as paying your workers or buying materials to make a last minute order.
There are other options available, however, and these bespoke finance solutions can often help you regardless of your situation by offering both secured and unsecured loans.
Let’s take a look at the different types of import finance that you could utilise.
What are the types of import finance?
There are two main types of import loans available from traditional banks.
Loan against import
Loans against import essentially mean that you secure your imports, so you can use them as soon as you receive them but the bank technically has ownership over your goods until you can pay back your loan.
This is often used when you trade under documentary collection terms, but you can read more about that below.
Clean import loan
A clean import loan, on the other hand, means you use your invoices as evidence and shipment confirmation to secure your loan.
There is also import finance available from alternative finance providers.
Business loans
Whether or not a business loan is best for you depends on several different factors, all based on the importing your business requires.
This includes but might not be limited to:
- The age of your company
- How often you need to import your products
- Where your imports are from and your experience
- The state of your company regarding debts
- Your ability to pay back your debt
- The reliability of your cash flow between shipments
The answers to those questions can help you to navigate as to which of these different types of loans might be the best suited to your situation.
- Secured loans
- Unsecured loans
- Peer-to-peer loans
Secured loans
A secured loan is when you utilise your business assets and put them up in the case of non-payment as security.
This is so the bank or lender can take your property if you don’t make your repayments.
The positive is that you can often borrow a much higher amount than unsecured loans, plus it’s better for those with a poor credit history.
Unsecured loans
An unsecured business loan is a loan which you do not need to secure.
In other words, while some loans will require security like your home in case you don’t make payments, unsecured loans don’t.
However, because of this you usually are only able to borrow a smaller amount and for a shorter period, to lower the risk to the lender.
Peer-to-peer
Peer-to-peer lenders allow people to invest in a range of different businesses, by offering up at least £20 to help crowdfund a company, but sometimes investors might contribute a lot more.
For businesses, this can sometimes mean getting better rates than you might find with banks.
You may need to pay arrangement fees, but you could borrow this loan for around five years with some platforms.
Credit facility
A revolving credit facility is a continuous agreement with your lender rather than a fixed business loan or overdraft.
It allows you to borrow money, pay it back once you have sold your goods and then borrow some more when you have made a certain amount of repayments.
This is more flexible than an overdraft, which makes it an appealing option for many companies that might regularly require financing between sales.
Factoring or Invoice Finance
Invoice financing is when you sell your unpaid invoices to a third party, usually for a percentage of the overall sale, so you can have a quick injection of cash, typically used in emergencies or when you need to fulfil an order without the capital to do so.
What is import documentary collections?
This can help you trade internationally in a secure way.
Banks act as a middle-man between the importer (you) and the exporter (the company you are buying from).
It works by your exporter giving shipping details and payment instructions to their bank, which is then sent to your bank who accepts these documents and releases the funds to you.
Export banks don’t necessarily have to guarantee the payment, so you should check the credit status of the exporting company.
What are letters of credit?
Letters of credit are one of the most secure methods of import finance, as it is a legally binding agreement that you will pay for imported goods, and your exporter will need to deliver your products at the agreed time at the agreed place.
This is often the most useful for exporters that want the security of exploring new markets or countries.
What are guarantees or bonds?
Guarantees, as they relate to importing or exporting, refers to the assurance that you as the buyer, agree to provide your supplier so that security can be taken if you don’t meet the expectations of your contract.
This can help with establishing trust in a new business relationship, as everyone is legally obliged to keep to their commitments regardless of whether they are importing or exporting.
It can also help you to potentially borrow more than you may have been able to otherwise, as businesses will be satisfied that there will be consequences if you don’t make your payments.
Conclusion
In conclusion, there are many different options available for businesses that import goods, as you can benefit from guarantees for you as the importer, and for your supplier should anything go wrong.
Take a look at the ExpertSure guides to find out more about your finances, or fill out the form at the top of the page to compare import loan quotes.
