Import finance: covering the full landed cost of overseas stock

Your supplier’s invoice says $180k. The real cost of getting that stock onto your warehouse floor is closer to $225k, and almost all of it has to be paid before you’ve sold a single unit. That difference catches out growing importers more often than any other number in their business, and it’s the starting point for choosing import finance properly.

What does it actually cost to land a shipment?

Import finance is easier to size once you list every payment between ordering and selling. A typical container from Asia for an Australian wholesaler might look like this (illustrative figures only):

Cost	Example	When it’s paid
Supplier deposit	$54,000	On order
Supplier balance	$126,000	Before shipping
Sea freight and cargo insurance	$12,000	Before or on shipping
Customs duty (example of 5% on $180k; many goods under free trade agreements attract none)	$9,000	Before release
GST at the border (10% of the customs value plus duty, freight and insurance)	$20,100	Before release, unless deferred
Customs broker, import processing charge, port and local delivery	about $3,500	On arrival
Total cash out before any sales	about $224,600

The GST line is worth a closer look. Border GST is worked out on what the ATO calls the value of the taxable importation, a figure made up of the customs value of the goods, the duty, and the cost of transport and insurance to Australia. In this example that’s $201k, so GST is $20,100.

Run your own numbers through our GST calculator, and check you’re still making money after finance costs with the margin and markup calculator.

How does import finance work?

Most import facilities operate like a revolving line dedicated to shipments:

1. You place an order with the supplier and ask the financier for a drawing against it.
2. The financier pays the supplier deposit and balance directly, often in the supplier’s currency.
3. Depending on the facility, it may also pay freight, duty and GST, or leave those to you.
4. Each drawing has its own repayment date, commonly between 60 and 180 days.
5. You sell the stock and repay the drawing, freeing up the limit for the next order.

It’s a specialised form of trade finance. After goods are sold on credit, many importers also use debtor finance to unlock cash from customer invoices, and some lenders combine both in one arrangement.

How the deferred GST scheme frees up cash

This is the insight most first-time importers miss. Normally, the GST on imported goods worth more than $1,000 has to be paid along with duty and charges before Border Force releases the goods. Under the ATO’s deferred GST scheme, approved importers can instead report and pay that GST on their next monthly activity statement.

To use it you generally need an ABN, GST registration, monthly BAS reporting, online lodgment and electronic payment, and a clean record of lodging and paying on time. Quarterly lodgers should note that a move to monthly reporting doesn’t kick in until the following quarter begins, so leave lead time.

Why it matters for finance: for a business that’s registered for GST and making taxable sales, the deferred GST and the GST credit for the same import are both reported on that monthly BAS, so the net cash effect can be close to nil. In the example above, that’s $20,100 that doesn’t need to be borrowed at the border. A smaller facility costs less to run.

Late BAS lodgment or unpaid tax can cost you eligibility. If that’s your situation, read our page on business loans when BAS lodgements are late.

What do import financiers look for?

Criterion	What helps
Import track record	A history of bringing in similar goods from repeat suppliers
Supplier reliability	Suppliers who deliver on time and to specification
Gross margin	Enough margin to absorb freight, duty, finance costs and currency moves
Sell-through speed	Evidence that stock sells within the term you’re asking for
Insurance	Adequate cargo insurance for the shipping leg you’re responsible for
Customs and tax compliance	Clean declarations and up-to-date BAS
Customer quality	Who you sell to and how fast they pay

Lenders in our directory that list trade or import funding include Octet, Moneytech and ScotPac. Banks are often the cheapest source of import facilities for established businesses that meet their criteria, so ask yours first. If your bank has declined, specialist trade financiers tend to look harder at the goods and the margin than at your property position.

Planning your next container? Tell us about the order; it’s brief, and enquiring has no effect on your credit standing.

Common mistakes importers make with finance

• Funding the supplier but not the landing. A facility limited to the supplier’s invoice can leave you hunting for $30k or more in duty, GST and charges with the ship already at port.
• Picking a term that’s too short. If stock takes 120 days to sell through, a 90-day drawing turns into a repayment you can’t fund from sales.
• Ignoring currency. An adverse exchange-rate move between order and payment changes your cost. Ask the financier about forward cover or paying at the time of order.
• Paying full deposits to new suppliers. For an unproven supplier, a letter of credit can protect you by tying payment to shipping documents.
• Forgetting the timeline. Customs, quarantine inspections and port congestion can add days or weeks. Build a buffer into the repayment date.

What if import finance isn’t the right fit?

• Funding for buying stock and inventory lays out the full range of stock-funding options.
• A business line of credit works for smaller, irregular imports.
• Unsecured business loans can fund a one-off shipment when you don’t yet have the history a trade financier wants.
• Property-backed funding, such as a secured business loan, gives a larger buffer if you own real estate.

Our guide to importing into Australia covers the import process in more depth, and the importers and exporters industry page explains how lenders view the sector.

From purchase order to a funded shipment

Importing well is about timing: paying suppliers, the shipping company and the border before your customers pay you. A facility built around your real landed cost and your real sell-through speed takes most of the stress out of that cycle.

Want help mapping that out? Our short form is the starting point. Allow about a minute, and rest easy that a simple enquiry leaves your credit history alone. Your shipment details are seen by our team rather than distributed to a long line of lenders, and the person who reads them is the one who calls you. Careful figures for order value, supplier terms and annual turnover mean the option we bring back is built for your actual shipments.

Talk to us about your next shipment →