Import Loans

Benefits and features

• Enables you to seize business opportunities with improved cash flow

• Enhances your business reputation with timely payments to your suppliers by HSBC

• Extends your credit period on top of that given under Documentary Credit/ Documentary Collection

• Strengthens your negotiating position with suppliers by being able to accept quick payment terms

There are two types of import loans, a) Loans against Import (Trust Receipts) and b) Clean Import Loans. Both are working capital facilities. Working capital is defined as your current assets minus your current liabilities or the capital required to carry inventory and receivables.

Both loans are available to you when you

• Trade on Documentary Credit terms,

• Trade on Documentary Collection terms,

• Buy goods without using any traditional trade instruments

Loans against import

When goods are imported, most buyers need time to turn these goods into manufactured and saleable items. Even if you are a trader without manufacturing activities, the goods will usually be held as inventory for some time. A Loan against Import (LAI) provides the financing to enable you to pay for the imported goods and covers the period up to the point of sale. By setting up a LAI as payment for the Documentary Credit, goods are released to you under trust receipts (TR) for the manufacturing period. A TR means that while you can use the goods, the goods belong to the Bank until you settle the loan. Likewise, goods are released to you with LAI as payment for Documentary Collections (Against Acceptance/Against Payment).

Clean import loan

A Clean Import Loan is similar to a Loan Against Import except that the advance is made to you upon production of supplier invoices and evidence of shipment only.

Flexibility in financing

What if a supplier requires immediate payment but you won't have the funds until you can collect the proceeds from selling the goods to your own customers? What if your customers want credit terms beyond that granted to you by your supplier? Rather than finding an alternative supplier or refusing business from potential customers, an Import Loan bridges the gaps for you and provides you with more flexibility in your business decisions.

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