A Great International Financing Solution
As we work to assist our customers with all aspects of their business plan, the greatest challenge seems to be financing of their projects. Our customers are sometimes faced with extremely high interest rates, requirements for collateral that are more than the loan itself, bureaucracy which brings projects to a slow crawl and a variety of other challenges. We are constantly trying to find creative solutions to help them.
A potentially great solution for some of our international customers is the 360 day insured receivable through Ex-Im (The Export-Import Bank of the United States). Insta-Pro has established an Ex-Im insurance policy which will allow us to extend 360 Day Terms From Date of Dispatch to our customers on equipment orders that range from $50,000 to $300,000.
Customer benefits of the program are:
- Instead of making an initiation payment 12-16 weeks prior to dispatch, they make a 50% payment 26 weeks (180 days) after dispatch.
- Final payment is 51 weeks (360 days) after dispatch instead of one week prior to dispatch.
- Interest rates and Ex-Im fees will vary over time and location, but have generally been around 9% of the value of the purchase versus many International banks charging interest rates 2-3 times higher.
- No collateral to tie up during this time.
- The ability to start generating revenue prior to making a payment.
- Security of knowing product has arrived at their facility prior to payment which also may be a country requirement.
Project requirements (Insta-Pro International Example Only)
- Customer pays a 3% fee as part of the equipment invoice which rolls into the payment terms
- Ex-Im approval requirements:
- Credit report which will cost the customer $200-$300 up front, but will be deducted from the final invoice if the customer is approved for 360 day terms.
- One trade reference with similar dollar value and terms – this means a supplier that already extends similar credit to your company.
- High quality financial statements for two years which indicates a healthy balance sheet and income statement (these statements must have audits and/or have signatures from the owners).
- Company in business for at least 3 years in a similar line of business.
As you can see, this is a really attractive option for those equipment buyers who have a good business history and financials to back it up. If buyers are purchasing parts only, the terms are for a maximum of 180 days and in that instance, they pay 100% of the invoice at the 180 day point in time after dispatch.
All quality equipment manufacturers can offer unique financing solutions. Be sure to check what your options are in order to assure you are utilizing the best financing vehicle for you and working with the best manufacturers.
