CONTRIBUTED EDITORIAL
Importing to Australia? Exporting from China? The Transaction Has Never Been Simpler
Clive Isenberg - Octet Finance
Getting the competitive advantage for your business in China can often mean your company will succeed where many others will fail. However, accessing the Chinese market can be tricky business and financing for SME’s can be particularly problematic when getting started, writes Octet’s Managing Director, Clive Isenberg
When starting out as an importer from China into Australia, there is usually an initial negative impact on an importing SME's cash flow as the business has to provide bank security in order to meet the payment demands of the exporter. These demands include setting up bank letters of credit on order acceptance or providing the required 20percent to 30percent deposits on acceptance of orders and then the balance of the payment on shipment. Manufacturers in China generally require payment on shipment which means that the SME’s cash flow can be substantially constrained as they will have to wait at least 30 to 60 days before they can sell the goods. Time lags and credit approval periods can create a difficult barrier to entry for many SME’s but there are ways to overcome this by considering the use of alternative financing products.
Business Transaction Facilities recently introduced into the Australian market by Octet Finance can provide unsecured (no debenture, no property, no guarantee), interest free import lines of credit to tide SME’s over this initial period before they receive and then on sell the goods. It works in a similar way to a consumer credit card, but with a much higher limit. This makes the transaction seamless, and no longer forces a proprietor into the unfortunate position of putting up personal collateral for the business to get their feet in the door.
This system works equally well for Chinese exporters who receive payments for their goods on time with confidence and security, and Octets Online Portal allows for a communication bridge between both parties to insure a running dialogue to iron out any issues.
For more information on Octet’s Business Transaction facilities visit Octet’s Website: http://www.octetfinance.com
or contact Clive Isenberg directly on T: 1300 8OCTET (1300 862 838)