International Trading is generally a long & complicated process due to all the logistics involved. Importers and exporters bear several costs & risks such as Tariffs & taxes, currency fluctuations, and risks of non-payment and non-shipment. Here, import business financing help global traders to facilitate an overseas transaction. This blog helps you know what is import financing and its types. 

What Is Import Finance?

Import finance is the process of funding the gap between receiving the goods and sending the payments. It is a special type of trade finance where any bank or financial institution finances the purchase of the goods that are being purchased & exported from one country to be imported into another country. To put import finance meaning simply, import finance is the capital that is being used to bring the goods into the country.

Import trade finance helps international businessmen build security in global trades and mitigate the risks. Some of the import transactions can be a burden on the business’s cash flow due to the involvement of logistics. Plus, due to the long time gap between the purchase and delivery of goods, the businessmen want to cover their expenses until the goods arrive. Here when import finance comes into the picture. This import loan finance provides short-term finance to the importers and helps them reduce risks.

Types of Import Trade Finance

Import finance facility provides credit options to international traders and enables them to purchase goods without cash flow issues. Apart from that, it helps the importers to bring goods into the country and fund their business requirements.

Read more: https://www.emeriobanque.com/blogs/import-finance-and-its-types