Business finance for import & export businesses

Why the trade cycle is so cash-intensive

Importers and exporters carry one of the longest cash cycles of any sector. You often pay an overseas supplier a deposit — sometimes 30% — before they start production, with the balance due before the goods even leave the port. From there, weeks at sea, customs clearance and onward delivery can pass before you can sell, and longer still before your customer pays.

On top of the goods themselves, you're funding:

• Freight and shipping, which can swing sharply with global container rates.
• Import duty and import VAT, payable as goods land in the UK, not when you sell them.
• Currency exposure, where a moving exchange rate changes your landed cost between order and arrival.
• Demurrage and storage if clearance is delayed at the port.

The result: large sums committed for months before any revenue returns.

What import & export firms use funding for

Short-term finance is usually about bridging the gap between paying overseas and getting paid at home. Common uses include:

• Supplier deposits and balances to confirm an order and release production.
• Freight, duty and import VAT due as a container lands.
• Buying ahead of a peak — stocking up before a seasonal selling window when lead times are long.
• Fulfilling a large export order where you must produce or buy stock before your overseas customer pays.
• Absorbing a currency or freight-rate spike without delaying a shipment.

Funding the order-to-cash gap means you can accept larger orders and longer lead times instead of capping growth at whatever your bank balance allows.

What to consider before borrowing

Cross-border trade has more moving parts, so test the deal before you fund it:

• Is the demand confirmed? Borrowing to fund a firm purchase order is firmer ground than buying speculatively into stock.
• Have you costed the full landed price? Duty, import VAT, freight and FX all sit between order and shelf — model the lot.
• How will currency move? If you pay in dollars or euros but sell in sterling, a hedge or buffer protects your margin.
• Does the facility term match the voyage? A 90-day cycle needs finance that lasts the cycle, repaid when the goods sell, not before.

This is educational information, not financial, tax or customs advice — check duty and VAT treatment with your own adviser.

How short-term company finance fits

Credicorp lends short-term working capital to the UK limited company doing the trading — not to the director personally. With no personal guarantee, your home and personal assets aren't pledged against the facility, which matters in a sector where a single shipment can represent a large share of your turnover and outcomes depend on factors outside your control.

A short facility is built to be drawn when you pay a supplier deposit, freight or import VAT, then repaid once the goods sell through. Where you import or export continuously, a revolving line like Credicorp Flex lets you fund successive shipments and repay as each cycle completes; a fixed business loan suits a single large order. Register your company to apply.