How To Turbo-Charge Your Import Business With Purchase Order Finance
It’s 7am, Monday morning. I’m watching my 18 year old son chomp through his cereal and slurp his orange juice. Today he’s sitting the 2nd part of the HSC English paper and from what I can gather from his demeanor and monosyllabic answers to my well intentioned paternal enquiries, he seems pretty relaxed – which is good.
In the background, Channel Nine’s Ross Greenwood is talking up the Aussie Dollar, and doing a pretty fair job of it. After teasing us briefly with the possibility of it hitting $1.20US (which has me ready to book a holiday to Hawaii before Christmas) Ross quickly brought us back to earth by saying that $1.02US was more likely. He then took us back to Feb 2009 when it was $64.99US. (Worth having a squizz at: http://money.ninemsn.com.au/blog.aspx?blogentryid=709336&showcomments=true)
Not many exporters buying Moet at the moment. Turn 180 degrees and importers are trying to get their breathing under control. It’s their time. It will pass like (most good and bad things), but right now it’s game on.
Like most verticals however, an importer’s growth is typically regulated by its capital resources. Which traditionally would mean that whilst you might not be able to take on a lot more work at this juncture, the work that you do take on will have very, very healthy margins. Substantially higher than say Feb 2009 as alluded to above – which is good.
How would you like to make good even better? Too good to be true? I think not. Here’s why.
Earlier this year, AR launched a product called Purchase Order (PO) Finance http://www.artradefinance.com.au/purchase-order-finance/. Conceptually, there’s not much new about it, but as Henry VIII used to say “everything’s in the execution.” (I am not sure if he said that, but it sounds like something he could have said.) To cut to the chase, show us a PO from a solid customer and prove your manufacturer’s ability to fulfill the order, and we’ll cover the cost (including shipping, duties and other sundries) until final payment by the end customer.
“At what price?” you cry. “A few points a month,” I respond. Which in a time of fat margins, makes a lot of sense. It also makes a lot of sense if you want to expand you business, be it new or well established.
Now you’re thinking about caveats. “What’s the catch?” you ponder. You partner wanders into your office and you run it passed them. “They’ll want fixed assets,” they confidently state. Tell them from me, we can do the deal without taking out a 2nd mortgage on your or their home.
You know what? Instead of running through all the reasons why you shouldn’t do it, or “it’s too good to be true” scenarios, get on the blower and call us.