Importing Equipment from Overseas – What are Your Options?
Customers importing equipment direct from overseas has been increasing in recent years with the ability to be able to source goods directly from suppliers. Access to the web has made this easier than ever.
One question we often get asked is what is the best way to finance this import? Often our clients will approach their bank directly without knowing all the alternatives provided available to them including not having to tie up existing security held by their Bank.
Importing – Key Things to Consider
- What are the payment terms required by the Supplier?
- Are you taking any payment risk?
- Is a deposit required?
- Is a Letter of Credit required?
- Is the purchase in foreign currency?
- How do you mitigate the exchange risk?
- How do you structure the transaction?
What are other items to consider?
- The financial strength of the supplier – what happens if a deposit is paid if the equipment is not shipped or delivered?
- Does the equipment need to be installed and commissioned at your premises? If payment had been made when it was shipped can the supplier ensure the equipment is commissioned and working to your satisfaction?
- Can the supplier provide the equipment in a timely manner and have it operating when required at your premises?
- What GST is payable when the equipment arrives in Australia? (link to ATO)
How we help!
Early engagement with your specialist finance broker is important. We can assist you with structuring the transaction to provide additional protection against the pitfalls of importing equipment including arranging the financing of the import (including a Letter of Credit, Forward Exchange Contract and Trade Finance) and the conversion to the Equipment Finance product).
To find out how we can help you with our Importing Equipment Finance options please contact me on – 0400 969 131