Import finance

[cheekymeerkat]

Can any fellow PH's advise what repayment terms they get from their bank's when importing stock?

I have the fortunate arrangement of paying for my Chinese containers only once they have docked at Southampton. A few days before it docks, I instruct HSBC Trade Finance to pay the supplier, and then I have to pay the import loan back 35 days later. It's a revolving facility that I can call on any time.

CASH IS KING so I would much prefer 60 days, the interest is paltry anyway but HSBC insist on 35 days being the norm??

It's got me thinking how my UK suppliers cash flow arrangements are, as I know some of them import for example a container of garden product to sell over 6 months, however if they only get 1 month to pay for the stock, that must be a killer for cash flow?

[foliedouce]

What interest rate does HSBC charge you?

We import health and fitness products from China in high top containers, typical order value is US$100k, our biggest customers are trade so are on 30 day terms but we do some B2C for which we get paid immediately.

As you say cash is king and we currently pay the factory whilst the product is on the water. It’s financed through cash flow or occasionally we as shareholders get our chq books out to put some money in on a temporary basis.

We looked at a trade finance facility and they allowed repayments up to 120 days on a revolving facility basis. The problem was the fees. They wanted 3% a month!!!! Crazy money that would erode our margins so we declined and continue to self finance.

Happy to dig out the paperwork if you want, please send me a PM.

Thanks

Edited by foliedouce on Tuesday 22 January 21:00

[cheekymeerkat]

Thanks for your reply,
We pay 4.5% interest (annual) on any loans, but HSBC do have personal guarantees, and a charge against my home as collateral.