Import and supply chain finance: funding stock from the factory to your shelf

Import finance pays for the stock you’re bringing into Australia before you’ve had the chance to sell it. Instead of emptying your account to pay an overseas factory, then finding more cash for freight, duty and GST when the container lands, a lender covers those costs and you repay from sales. Supply chain finance is its close cousin: a facility that settles your suppliers on time or early while giving you longer to pay.

This page focuses on the importer’s side of the story. For the wider family of letters of credit, export funding and guarantees, see our overview of trade finance.

How does import finance work?

A typical facility follows the goods:

1. You place an order and share the supplier’s pro forma invoice with the lender.
2. The lender pays the supplier, either the deposit, the balance at shipment, or both.
3. The goods ship. The lender may hold or track the shipping documents.
4. Landed costs are funded, if the facility allows, so freight, customs duty, import GST and broker charges don’t hold the goods up.
5. You receive and sell the stock.
6. You repay each drawing within the agreed term, often linked to how long your stock usually takes to sell.

The term of each drawing matters. A facility that wants repayment 60 days after shipment won’t work for stock that takes four months to sell through.

What’s in the landed cost you may need to fund?

Many importers budget for the supplier invoice and forget everything that happens after the goods leave the factory. The Australian Border Force’s cost of importing guide explains that imported goods are generally liable for duties and taxes unless an exemption or concession applies, and that GST is payable on imported goods unless they’re covered by an exemption. In practice, the costs stack up like this:

Cost	When it’s paid	Can it be financed?
Supplier deposit	When the order is placed	Usually
Supplier balance	At or before shipment	Usually
International freight and insurance	At booking or on arrival	Often
Customs duty	Before goods are released	Often
Import GST	Before release, unless deferred	Often, or defer via the ATO
Customs broker, port and transport charges	On arrival and delivery	Sometimes

Ask any lender exactly which of these lines it will fund. The difference between financing the supplier invoice and financing the full landed cost can decide whether the goods sit at the wharf for a week.

What is supply chain finance, and when does it help?

“Supply chain finance” gets used in two ways.

Buyer-led supply chain finance (sometimes called reverse factoring) is set up by a buyer so its suppliers can be paid early. For an importer, the useful version is a facility that pays your overseas suppliers when they want to be paid, often on shipment, while you repay on longer terms. Your supplier gets certainty, and you get time to land and sell the goods.

Supplier-side finance, where you’re the one waiting on a big customer, is really invoice finance and works differently.

For importers, supply chain finance helps most when suppliers are pushing for earlier payment, when you want to negotiate a better unit price for paying promptly, or when you’re consolidating orders from several suppliers into fewer, bigger shipments.

Can the deferred GST scheme ease the squeeze?

For many importers, import GST is the cost that hurts most at the border. The ATO’s deferred GST scheme lets approved importers defer GST on all taxable imports and pay it through their monthly business activity statement instead of at the time of import. To be eligible you need an ABN, GST registration and to lodge your BAS monthly, online, paying electronically. Quarterly lodgers must move to monthly reporting first, and you must apply and be approved. Up-to-date lodgements and payments are part of the test.

Deferral doesn’t remove the GST, but by moving the payment off the wharf and onto your monthly BAS, it can reduce the cash you need to find per shipment. It’s worth raising with your accountant before you size a facility.

If you have a shipment on the water or an order ready to place, find out what funding could cover it.

What do import finance lenders look at?

• Your supplier. How long you’ve bought from them, how reliably they deliver and whether quality issues have caused returns.
• The goods. Finished products with an established market are easier to fund than bespoke or perishable items.
• Your margin. Landed cost versus selling price, after the cost of finance.
• Sales history. How quickly similar stock has sold before, and through which channels.
• Your own customers. If you sell on credit, how quickly they pay you.
• Your tax position. Lodgements and any ATO debt, which are considered case by case.

Illustrative example: an online outdoor gear retailer

Illustrative example: an online retailer selling camping and outdoor gear orders its summer range from two overseas manufacturers. The stock costs about $180k at the factory, and freight, duty, import GST and local delivery add roughly another $40k. Sales from the previous summer show the range sells through within about three months of landing.

An import facility pays the supplier deposits and balances directly, then funds the landed costs when the container arrives. The retailer repays each drawing as orders come in over the following months. Because the business also applies for the deferred GST scheme, later shipments need less funding at the border.

Common mistakes importers make with finance

• Funding only the supplier invoice and being caught short for duty and GST on arrival.
• Choosing a term shorter than the sell-through period. Repayments due before the stock sells create a second cash squeeze.
• Ignoring currency movements. A weaker dollar between order and payment raises your cost.
• Ordering beyond demonstrated demand. Lenders fund stock that has sold before; a much bigger order needs evidence.
• Not comparing a simpler loan. If you own property, a secured business loan from $20k to $5m can fund several shipments without per-order paperwork. Smaller, regular orders may suit an unsecured business loan sized on turnover, typically $5k to $500k.

Once goods have landed, inventory finance can release cash tied up in stock on hand. Online sellers can also see how lenders read their figures on the ecommerce business loan page.

Have an order to land?

Your supplier wants paying, the container’s booked and the border will want its share before you can sell a thing. Tell us what you’re importing, the rough landed cost and when the money’s needed. The form takes about a minute, and there’s no credit check just to enquire. We don’t pass your details to a queue of lenders, so there’s no flood of calls. A real person looks at your supply chain and calls you back. The more accurate the numbers you give us, the better the first match will be.

See what your next shipment could look like →