Sale and leaseback of equipment is a financial option available to businesses that is something…
Arranging Import Finance
Whilst it is possible to make payment for the goods by Telegraphic Transfer, this involves a fair degree of risk. For this reason, a far better option is payment against documentation – that is; a Letter of Credit.
The safety in this approach is that payment is not made by the Bank until the shipping documents have been received and are deemed to be in order.
If discrepancies are identified, payment will be withheld until they are rectified.
Commissioning & Final Payment
Conversion of the Letter of Credit to a Loan Facility
Once the final payment has been made, the Letter of Credit can be converted to a Loan Facility.
For example, it may be a Lease over 5 years with monthly payments of $x and a balloon or residual at expiry.
Before this can occur however the Finance Provider needs to inspect the goods before payment can be made.
Involve your Accountant
How we can help with Import Finance
Import Finance requires specialist input as it can be a minefield. It can involve significant costs, and extensive delays, if things are not done correctly. A great idea or opportunity can quickly become your worst nightmare!
As an Equipment Finance specialist, I enjoy helping my clients navigate the Import Finance maze!
I work closely with the Trade Specialists within the major Banks (and other providers) to help my clients get the equipment they need to grow their business.
If you are thinking about importing equipment which you want to finance, don’t hesitate to give me a call!